Monday, August 5, 2013

More great economics from Ben Franklin

Some of you may be aware that Franklin had one of the earliest liquidity preference theories of interest (maybe the earliest - I'd have to read a lot more of the mercantilists before I claimed that*).

It turns out he also beat Gesell to a stamped money sort of idea too. See Miles Kimball for details.

* - This seems to be one contention of a book I picked up recently by the well known historian of economic thought, Marian Bowley, titled "Studies in the History of Economic Theory Before 1870". It's a relatively innocuous title, and she does cover several issues, but it looks like a lot of time is spent revisiting mercantilist thinking on the interest rate, particularly interest as a monetary phenomenon. Keynes of course credited the mercantilists with a great deal of forward-thinking too, and in the readings I've done in Mun and Malynes I tend to agree.


  1. Speaking of the history of read are you on the literature (for both primary and secondary sources) for the Real Bills Doctrine, Daniel? Thinkers that have been categorised as advocates of the Real Bills Doctrine include John Fullarton, Thomas Tooke, Simon Clement, Charles Bosanquet, John Law, and even Adam Smith.

    As I've said before in a comment on one of your earlier blog-posts (see the link below), the Real Bills Doctrine has an uncanny resemblance to Post-Keynesian formulations of endogenous money.

    In any case, it seems to me that liquidity preference manifests itself regardless of whether the money supply is completely "endogenous" or "exogenous", or whether the framework being used is the Real Bills Doctrine or the Quantity Theory of Money. did you get that copy of Marian Bowley's book?

    1. I don't really know much about the real bills/bullionist controversy stuff.

      I got Bowley's book at a used bookstore in DuPont Circle that I like to go to.

  2. Mises remarks somewhere that gold mine owners are always in favour of a gold standard. Similarly, he mentions that printers are often in favour of paper money for the same reason and gives Franklin as an example.


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