Recent developments in monetary economics stress the nature of monetary injections, emphasizing that they have implications for the relationship between money and prices. In contrast, traditional approaches posit stable money demand functions that are independent of how money is injected. The former approach implies that certain proportionality relations between money and prices need not obtain. This permits the two approaches to be empirically distinguished, but only if an appropriate "experiment" is conducted. The colonial period is one such experiment. Colonial evidence suggests that the nature of injections is crucial to the effect on prices of changes in the money supply.

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Some Colonial Evidence on Two Theories of Money: Maryland and the Carolinas

Yellowing the Logarithm: How Money Solved the Problem of Freedom

https://academicworks.cuny.edu/cgi/viewcontent.cgi?article=3350&context=gc_etds

Revolution Against Empire: Taxes, Politics, and the Origins of American Independence

If they could be believed, Farley W. Grubb's recent papers on the early U.S. monetary system would be important contributions to scholarship and public policy. This paper shows, however, that Grubb's papers should not be believed. Grubb's key assumption, that the medium of exchange can be inferred from the unit of account, is erroneous, rendering his data analyses nugatory. State-issued bills of credit did not play the role Grubb attributes to them in the years after 1781, when most Americans had eschewed government paper money in favor of full bodied coins and convertible bank liabilities. Bankers did not foist the Constitutional clause banning state emissions onto an unsuspecting public.

State 'Currencies' and the Transition to the U.S. Dollar: Clarifying Some Confusions

Histories of the early American political economy present that world in fractured form, dividing political and constitutional dimensions from economic aspects. The fragmented approach reflects an old, oft-denigrated, but still powerful imagery, one that naturalizes economic activity as a set of myriad spontaneous and individuated exchanges, conducted with a conventional medium, money, and predictably composing a market sphere. The motif and its underlying assumptions in turn dissuade exploration of money and markets as territories of public decision, insulating by neglect the structural power of determinations made there. This essay traces the naturalization motif through a historiography of macroeconomic models of money. It then considers how money, recognized as a dynamics of value, would look if the law structuring it were approached as a complex set of relations that expressed, reiterated, and revised the distribution of authority in society. The early American political economy appears in a different light: money becomes a matter of value and governance at once, and therefore a crucial area of constitutional debate. Through that medium, the political economy of early America is transformed not once but repeatedly, from a mercantilist to a domestic paper to a liberal capitalist form.

The Market as a Matter of Money: Denaturalizing Economic Currency in American Constitutional History

Although it is obvious that politics, money, and economic conditions were closely interrelated in the twenty years before the Revolution, this is the first account to bring together these strands of early American experience. Ernst also provides and analytical case study of the impact on America of British monetary policy during a period of dramatic shifts in the Atlantic economy and suggests that earlier studies are questionable because of theoretical misconceptions concerning the importance of visible" money."Originally published in 1973.A UNC Press Enduring Edition -- UNC Press Enduring Editions use the latest in digital technology to make available again books from our distinguished backlist that were previously out of print. These editions are published unaltered from the original, and are presented in affordable paperback formats, bringing readers both historical and cultural value.

Joseph Albert Ernst

Papers

Money and Politics in America, 1755-1775: A Study in the Currency Act of 1764 and the Political Economy of Revolution