[SIDE CONVERSATION]
SPEAKER 1: So we're delighted
to have everybody here.
And we're about to start
of the panel on "Monies
and the State in
an Age of Empire."
And our moderator for this panel
is going to be Stefan Eich.
Stefan's research is
in political theory
and the history of
political thought,
in particular in the
political theory of money
and financial capitalism.
He is currently the
Perkins-Cotsen Postdoctoral
Fellow in Princeton.
And he holds a PhD in
political science from Yale,
a masters in political thought
and intellectual history
from the University
of Cambridge,
and a BA in philosophy,
politics, and economics
from the University of Oxford.
So we're looking
forward to that.
STEFAN EICH: Thank you.
Welcome, everyone.
I'm just going to introduce
the speakers very briefly.
And then they have
around 15 minutes each.
And I think then,
actually, we're
going to turn it straight
over to you and ask questions.
And I'm going to just insert
my questions where they fit.
But rather than taking up
more time than necessary,
you really should
have an hour of Q&A.
So just to introduce the
speakers very briefly,
to my right is E. George Gallwey
who is from Harvard University,
presenting a paper
entitled "From Distribution
to the Protection
of Private Property,
the Politics of Money and Credit
in the Early United States,"
next to her, Andrew Edwards
from the University of Oxford,
presenting on "Money
to Burn, Money
to Spend, A Tale of Two
Monies at the Beginning
of the American Revolution,"
then next to Andrew,
Elizabeth Cross from Georgetown
University presenting
on the "French
East India Company
and the Monetary Politics
of the French Revolution,"
and finally at the
end, James Livesey
from the University of Dundee
presenting on "Local Debt
for Local People,
Debt and the Languedoc
1750 to 1789."
Do you have any preferences
in terms of order?
Otherwise, I would say that we
just go through this way and--
ANDREW EDWARDS: The
published order.
I don't know.
STEFAN EICH: OK, let's
stick to the published order
and return from where
I just introduced them.
And we begin with James,
then move on to Andrew, then
Elizabeth, and then George.
JAMES LIVESEY: OK,
thank you very much.
And like everybody
else, I think we'd
like to thank the organizers
for all the work they
put in gathering this
enormous number of people
who are interested in money
and the democratic order.
So I'm kicking off.
And what I thought I'd ask
was the question, why would
you care, most of you people
not being historians apart
from this crowd over
here, why would you
care about imperial money
and the question of money
and empire in the 18th
century if you didn't
care about the 18th century,
if you weren't already
committed to being a historian?
What's going on here?
And what I want to
suggest is that when
we look at that 18th
century moment, well,
we're looking at a moment
of distributed sovereignty,
that the question of empire
from when we're looking
at it at the purposes for
money, it's not so much
interested as the externality
at what empire does
to other people, rather empire
gets interesting on the inside,
because all empires are
massively differentiated.
And therefore, that notion
of distributed sovereignty--
SPEAKER 2: Can you
speak into the mic?
JAMES LIVESEY:
Speak into the mic--
OK, I find that very hard.
But anyway, I will try.
In distributed sovereignty,
different kinds of money
are being emanated at
different levels of the empire.
There may be a story
about sovereignty
and a story about value
held at the imperial center,
but that is not
experienced at the--
not at the imperial
meridian or even
at the intermediary
sections of the empire.
And in the 15 minutes that
we have to speak within,
which we should, I am going to
make matters worse by squeezing
in two, not one papers.
And I'm going to talk very
quickly about Berkeley
to give you some sense of
the intellectual history
of imperial money
of the 18th century
and then talk about
the Languedoc, which
is a much more rich example.
So the story is rooted
in intellectual history.
And what it wants to speak
to, what it wants to pick up
is the observation that's
made by lots of people
that we live with a folk
story about the transition
from barter to
spontaneous money.
And most people, if you
look at David Graeber
if you look at Chris'
book, they locate
Adam Smith as
absolutely at the center
of who disseminates that story.
Where does the notion that money
as a valueless intermediary
for actions of spontaneous
individuals, that money
itself carries no cogency,
where does that story come from?
And they locate Smith.
And if you push, if you do the
intellectual history of where
Smith gets this idea, if you
read Dugald Stewart's 1791
biography, Stewart
identifies Berkeley,
the Irish philosopher,
and his Querist of 1735
as the key source.
And that's really interesting,
because of course,
Berkeley is one of
the first theorists
to explicitly endorse a
notion of money as purely
conventional, not rooted in
specie, not rooted in an asset,
but purely an ideational form
that represents what he called
the industry, the value,
the future production
of a community.
What people don't realize is
that the source that Smith gets
this story from, a 1750
version of the Querist,
is a highly edited version
of the 1737 edition.
And the 1737 edition
was presented
to the Irish Parliament as
a plan for a central bank.
And to speak precisely to
the topic of the conference,
it was the Irish Parliament
which should constitute itself
as a central bank, but only
a reformed Irish Parliament.
Thus, sovereignty and money
were absolutely mapped directly
onto one another.
And you ask now,
where did Berkeley
come up with this amazing idea?
Of course, where he got
it from was America.
Between 1728 and
1732, Berkeley was
in Rhode Island sitting, waiting
for the money for his plan
to establish a proper
university in the colonies,
as they then were.
And he gave the money to
Harvard and Yale [INAUDIBLE]..
Waiting for that to head
up, himself and his wife--
and his wife, Anne
Berkeley, was the daughter
of John Forster, who had
founded the Irish National
Bank and 1716.
So basically, Berkeley's
Querist in 1735
is a theorization of
what he'd observed
in the American colonies,
which, as we know,
were a space of enormous
financial experimentation.
Since we're going to have a
lot of discussion about this,
there were all sorts of
needs that had to be met,
economic needs,
needs of exchange,
that various colonies
and various groups
met in various ways.
What Berkeley did, and he
writes the Alciphron in 1732
while he's thinking
about money, is
he recognizes that the
variability of the forms
of money that he observes
must mean that money
has no essential
referent, therefore can
be purely conventional
and can be
an act of pure political will.
So The Querist, which is an
enormously difficult text--
it's a deeply postmodern text.
It's set up as a
series of questions
rather than as a
series of sentences.
And you're led to work out
what The Querist actually means
through the act of reading.
It's an enormous--
you know, Berkeley who
believes in the centrality
of mind to everything,
he's got this--
It's a wonderful way in
which a philosopher actually
makes his method and his
source work together.
So it's a difficult text.
But The Querist theorizes the
one aspect of the experience
of the British empire.
But what it
illustrates-- and I'm
going to move to the
Languedoc-- what it illustrates
is that, in that moment between
the financial revolution,
somewhere the late 17th century,
and the Congress of Vienna
in 1815 which stabilizes the
global financial situation
and sets up the order-producing
rules which will then create
international finance as
we know it, in that moment,
the space of experimentation
is enormously wide.
Spoken of one experiment
that Berkeley's
Querist-- which of
course, sadly remains
an intellectual experiment.
The Irish Parliament completely
rejects this proposition
in 1737 on the grounds-- and
this is the interesting thing--
on the grounds that they felt
that any central bank set up
in Ireland would be
vulnerable to rent seeking
on the part of the
British Parliament,
and that a centralized Irish
fiscality would literally
make it vulnerable to
imperial extraction,
so you wouldn't do that.
You would restrict
yourself to informal means
of capitalizing the economy.
So that's itself, interesting.
And now I want to talk
about the Languedoc.
If Berkeley's is a
story of innovation,
the experience of the
Languedoc between 1750 and 1789
is one of what might be
called radical orthodoxy.
The institutions that
are used in order
to establish public
credit and to fiscalize
the economy of the province
are a historic arrangement.
It's a pays d'états, which means
that it has a right to impose
its own collection of
taxes, though of course,
it is the King who
authorizes that.
So the sovereign act
happens in Paris.
But then the governance acts
all happen in the Languedoc.
Between 1750 and 1789, as the
fiscal needs of the French
monarchy develop, more
and more of the governance
of the country is
pushed back onto
the level of the pays d'états.
They do more and
more of that work.
Just to give you one example,
one of the reasons that
the roads in the Languedoc
are so good-- in fact,
Arthur Young, when he does his
tour there in 1787 remarks that
they're too good, they spend
too much money on them--
is because the Languedoc is
running its own engineering
corps entirely separate
from the corps of engineers
and developing its
own road system.
So if you're looking at state
and state-like functions,
the province is stepping in
for more and more of those.
Between 1750 and 1789,
the French Monarchy
can only borrow money at 10%.
The estates of the Languedoc
are borrowing at 4%.
Thus, the estates
of the Languedoc
borrow for the monarchy and
then manage the debt itself.
The society is
sophisticated enough
that it can understand that
the exposure to the estates
is massively less than the
exposure to the monarchy.
That is because it's nested
within this deeply systematic
hybrid system which links
up political representation
with fiscality.
And frankly, you're
going to have
to buy my book which is coming
out with Yale next August
to get this.
In 15 minutes, I could not
go through the complexity
of the system, but there are
four different subsidiary
levels of taxation
and of governance
action, the estate, the
[FRENCH],, the diocese,
and the parish.
All of them are
establishing public credit.
All of them are
doing public works.
All of them have
development strategies.
And they're all congruent
with one another.
And this relies then on
a political community
which is capable of
spontaneously coordinating
with itself within that
fiscal political structure
in order to establish
rational outcomes.
And if one was doing
the economic history,
then one would look
at the relationship
between public investment
in the Languedoc
and economic performance.
And what you'd see is
that productivity goes up
by about 2% per annum
between 1715 and 1789.
And you get the more rational
allocation of assets.
Thus in half of
the province, not
in the lower half,
in the upper half,
in the upper Languedoc, the
areas which had been going over
to subsistence
farming, largely wheat,
are now put under
vines, mass producing
vines for mass consumption
back up in Northern France.
So what you're
getting is the use
of markets by farmers
and by peasant
families as a rational
strategy for their
own substantive well-being.
But that's linked into a
public strategy, linked
into a provincial strategy.
Getting to my time--
the study would ask, well,
god, if the old regime was
so rational, how in god's
name did the revolution
happen in 1789-- wow, right?
Sovereignty-- if you have
a revolution in 1789 which
is against privilege
and you have
a critique of the provinces,
not the [FRENCH] regime,
you raise the specter that
all of the sovereign debt
of the Languedoc could be
turned into privilege debt,
and thus non-state.
Thus the province effectively
liquidates itself in 1790
in order to make sure that
its debts could be repaid.
The system of governance worked.
But as soon as you had a new
model of national sovereignty
which went against the
distributed sovereignty which
had underpinned the
debt, that meant in order
to save the debt,
to save the capital,
the province had to go.
OK, thank you.
[APPLAUSE]
ANDREW EDWARDS: Let's see
if I can get this to work.
I'm using two different
computers at the same time
to present this presentation.
So I apologize in advance for
how that does or does not work.
Oh, OK--
ELIZABETH CROSS: So far so good.
ANDREW EDWARDS: Good,
hi, yeah-- so the paper
I'm presenting
today is entitled,
"A Tale of Two Monies,
Britain and France, North
America 1775 to 1776."
It's a comparative
analysis of two monies
at a single moment in the
history of the British Empire.
The first was British, called
upon in the House of Commons
on April 24, 1776.
Prime Minister Lord North told
Parliament that in order to,
quote, "exert that strength,
which when properly exerted
never failed to prevail,
British military might,"
Parliament needed to
borrow two million pounds
sterling at 3% interest.
North got the loan.
And by the end of
the year, Parliament
had raised 1.94 million pounds.
The second money was American.
Over the course of the year
prior to North's speech,
Britain's North
American colonies
had created monies for war.
Beginning within the weeks
of the clashes at Lexington
and Concord on April
19, 1775, the Colonies
created a variety
of paper monies
in order to fend off
Britain's impending invasion.
On the surface, these two
monies, loosely construed,
had much in common.
Both, after all, were
attempts to finance
war emerging from the
British monetary tradition.
However, if we considered
the internal design
of the monies involved, focusing
on the way the laws constitute
monies as processes rather than
simply arranging or procuring
them, one profound
difference emerges.
In Great Britain, money was
a permanent form of wealth,
in conventional terms,
a store of value,
saved, borrowed, spent,
and re-spent, but never
extinguished.
American monies were not.
They were literally monies to
burn, money with an expiration
date, a feature with significant
implications for the way
that American
society, in contrast
to that of the British, produced
and reproduced monetary wealth.
As we will see, the
underlying difference
between American
and British monies
had societal
implications as well.
The British monetary
system produced
semi-permanent monetary capital
and a permanent moneyed class
of legal owners to command
it, capitalists, if you will,
that would dominate financial
industrial capitalism
as it emerged in the
19th and 20th centuries.
No analog yet existed
in the American system.
The wealth embodied for a
term in America's paper monies
was extinguished with it.
Burning erased it.
American money could
not be, and in fact
was not the basis for a
permanent moneyed class yet.
Clarifying the distinction
between the British and
American monies in 1775 and 1776
requires seeing the two monies
as their British and
American designers seem
to have intended,
as forms of wealth
with a distinct relationship
to time, or in other words,
as modes of governance linking
pre-existing forms of wealth
with an imagined future.
We will explore
this distinction,
or I will, in three steps.
First, we will examine
the internal design
of the first
revolutionary monies
with a particular reference
to the Colonies' emphasis
on making them temporary
by burning them.
Second, we will
examine internal design
of British monies
raised at the same time
via parliamentary action.
And finally, we will
compare the two.
So first, money to burn--
and I have to use this computer
for that, money to burn.
All right, so perhaps
the strangest thing
about America's revolutionary
money is all the burning.
For example, in
July 1775, the act
establishing
Virginia's first bills
of credit of the
revolutionary era
appointed 10 men as a
committee to superintend
the burning of said
notes to be taxed out
of existences by the ordinances
of the Virginia convention.
New Jersey in February of 1776
ordinance authorizing 50,000
pounds of proclamation money
worth of bills of credit
established taxes so
that they would be,
quote, "burnt and destroyed."
On July 6, 1775, New Hampshire's
Fourth Provincial Congress
ordered that its notes,
quote, "when redeemed,
shall be consumed to
ashes in the presence
of the representatives
of the colony."
Pennsylvania's assembly
passed a tax, quote,
"on all estates in real and
personal" on June 30, 1775,
to make more certain
pain redeeming
discharging and sinking
the said bills of credit.
On September 29
of the same year,
the Pennsylvania Committee on
the State of Public Accounts
reported it had, quote,
"inspected and examined
the several public accounts
mentioned in the report,
and have burnt,
sunk, and destroyed
the different parcels
of bills of credit
as mentioned and
specified in the same."
Treasurer Owen Jones'
summary explained
to the colony, in that year,
had burnt and destroyed,
quote, "24,113 pounds, 17
shillings, and 11 pence" of,
quote, "the paper bills."
So it is clear from the context
that the phrase sunk, burnt,
and destroyed did not refer
to three different operations,
but one, and that is the
destruction of the currencies
that the provincial
legislatures had produced.
The process was not limited to
a specific region or colonial
tradition in 1775.
Most colony laws mentioned
burning explicitly.
And colonies that did not
mention burning immediately
pledged to sink or destroy
their bills just the same.
In case you were wondering,
the internal design
of the continental
dollar followed
that of the United colonies.
So on Thursday, June 22,
1775, Continental Congress
authorized a sum not exceeding
two millions of Spanish Milled
Dollars printed in
denominations of 1 to 20
on 403,800 paper bills.
A little over a month later
on Saturday, July 29, 1775,
having bumped the first
run by $1 million,
Congress laid down the
rules and intended to sink
the continental currency.
So the term sink again referred
to that same process of burnt,
sunk, and destroyed.
Congress meant the
bills to be annihilated,
not as some historians
still argue,
to be paid off in silver.
In order to be clear,
Congress passed a tax
on the same day equivalent
to the entire print run.
So bills received in taxes,
according to the law,
would be holed with a
one-hole punch, sent
to the continental treasurers
with a committee of five
men appointed for the
purpose would first, quote,
"examine and count
the content of bills,
and then in the presence
of the said committee,
burn and destroy them."
Colonies unable to send bills
would send gold and silver
if they had it, but
specie was not--
but the specie was not to spend.
The treasurer's would
keep hold of the specie
until, quote,
"demanded in redemption
for continental bills,"
after which, quote, "bills
so redeemed, they
shall also burn
and destroy in the presence
of the said committee."
This was considered unlikely,
given the general scarcity
of gold and silver.
The point was that all
of the bills of credit
would be consumed.
So the implications
for an American money
as a process existing in time
then start to become clear.
The colonies created money.
They did so in part because
they had little monetary wealth
to begin with, either
to borrow or tax.
But more importantly, they
intended to keep it that way.
The monies were designed
to self-destruct in order,
by implication, to preserve a
society where cash and money
capital of any kind was scarce,
and other non-moneyed forms
of property, which is a core
part of an 18th century man's
personality, identity,
and power, dominated.
In other words, if we considered
the bills of credit created
by the Continental Congress
Colonial Assemblies
as a process existing in
a time, it becomes clear
that in the future envisioned
in these acts of money
creation, when all
the taxes were paid
and the bills destroyed, the
assemblies expected something
like the status quo
antebellum, a society
with little pecuniary wealth,
but plenty of land, people,
and property, where
lawyers, yeoman, farmers
and slave-holding
planter merchants,
like the founders
themselves, reigned supreme.
If we take that view, it
becomes clear the burning was
as an integral part
of colonial money
as the paper it was printed on.
The end result of all the
printing taxing and the burning
would be an empty treasury,
an unencumbered populace,
and hopefully, victory.
No doubt, legislatures
would make more money,
but no one over the
course of the medium term
would be able to accumulate
it or capitalize it,
a fact with distinct
implications for America's
position in the 18th century
world of mercantile capitalism.
America's paper money
were temporary means
to temporary ends.
In other words, they were
quite the opposite of the money
being gathered just then across
the Atlantic, money to spend
and re-spend.
So if we turn to Lord North's
speech for April 24, 1776,
requesting money
for war in America,
it is immediately
clear that we're
on different financial ground.
As a financial matter,
Great Britain did not
make money to pay for its wars.
It borrowed money.
And by money, it meant
either gold and silver
or credible claims
for gold and silver.
The notion that British money
was in fact precious metal
outside of the control
the state was obviously
an ideological position,
but that prejudice was real.
And its consequences
for the internal design
of British money
were significant.
In 1776, when Parliament
needed to spend,
it felt the need
to find new ways
to coax investors to give
it the paper and metal
monies it desired in
return for compensation.
The implication was
that monetary wealth
pre-existed outside
of the state's demands
and needed to be coaxed back in.
Doing so requires
striking a bargain
with those who had money and
might be willing to invest.
Funding the war,
North argued, meant
navigating between two aims,
to make the best bargain
he could for the
public, and, quote,
"to give a stockholder
a reasonable profit
and encouragement to subscribe."
It also entailed
offering variety.
So for every 100
pounds invested,
investors would
receive two things.
First, they would get--
for the first 70
pounds, each investor
would get 3% annuities
worth 77.5 pounds, a top up
Lord North justified
as reflecting,
quote, "the fair market
price of the stock
subject to redemption,
the will of Parliament."
The next 30 pounds,
on the other hand,
would be turned into the
three lottery tickets.
The 600,000 pounds
from these tickets
would be distributed
into prizes, convertible
as well into 3% annuities.
And the interest
on these annuities
would be paid by new taxes
on wheeled carriages, stage
coaches, along with stamp
duties on playing cards, dice,
newsprint, and dentures.
North had apparently
heard rumors in London
that there was not enough
gold and silver in Britain
to meet the financial
demands such taxing borrowing
and spending required.
This complaint, he
argued, was unjustified.
The country was teeming
with gold and silver,
not much short of 20
million pounds, he guessed,
and plenty, he argued,
to meet any demand.
North's point was that Britain's
pre-existing monetary wealth
was suffice to meet any
needs the Exchequer put
upon it until America's
loyalty was restored.
In return for the wealth, the
government offered securities,
themselves were money-like.
The assets were divisible,
transferable, perpetual.
Every contributor
could assign them
to their executors,
their successors.
And everyone was entitled
to 3% interest payable twice
yearly at the Bank of England
until the government returned
the principal investment,
placing the investors' cash,
once again, outside the state.
So viewed as a process
existing in time,
it is clear that
Britain's money,
unlike North Americans',
represented a permanent form
of financial wealth.
The structure required
pre-existing monetary wealth,
both to borrow and tax.
It capitalized that wealth to
create financial securities
that were designed for supply
of perpetual monetary income,
a money equivalent
to a noble state
and valued on the same terms.
These securities were
callable, but only in return
for the principle
invested, returning
pre-existing monetary
wealth to investors where
it might be capitalized again.
There was no burning.
British money was
supposed to last forever.
Paper claims for gold
and silver and even coins
themselves might be
worn out, exchanged,
or destroyed by the
passage of time,
but the wealth itself would not.
So now let's put the two
forms of war funding and money
at play in 1775
1776 side by side.
On one side of the
Atlantic, we have
seen that American money was
temporary, destined to burn.
Taxes canceled the
bills of credit,
destroying their monetary value,
but also removing the lien
on properties, the
bills, and the taxes
to sync them represented,
a fact celebrated
in the bill's destruction.
And on the other, we have
seen that Britain's monies
were permanent.
They were money that
acted like gold and silver
even if they were not, what
Karl Polanyi famously called
a fictitious commodity, or
what Marx called money existing
as a commodity relation.
The differences
between these two
operations for the
societies orchestrating them
were profound.
As a process, American money
was designed to self-destruct.
In contrast, British
money reproduced
stores of pre-existing
money perpetually.
If we use John Levy's
definition of capital as, quote,
"a legal asset assigned a
pecuniary value in expectation
of its capacity to yield
a likely future pecuniary
income in capitalists,
the moneyed interest that
own them," this actually
produces a form of capitalism.
The implications
of this difference
for our understanding of
the American Revolution
has consequences that
again, are profound.
The difference suggests that
the American-- the market
revolution, and the
expansion of monied capital,
and the American
transition to capitalism
after the revolution may be tied
to a crucial decision regarding
American money.
Americans after ratifying
the Constitution
stopped burning it.
The American market
revolution in this sense
can be understood as the
beginning of a transition
from a system in which
money was burned regularly
and routinely to
one where burning it
is seen as a revolutionary,
wasteful, or simply
anti-social act.
More broadly, it
strongly suggests
that industrial and
financial capitalism
as developed in
the global system
of the 19th and 20th
centuries required
a permanent money as
the, quote, "sound basis
for modern wealth."
Finally, in terms of money
as a democratic medium,
it suggests that changing
money might change the world.
Thank you.
[APPLAUSE]
STEFAN EICH: Next we
have Elizabeth Cross.
ELIZABETH CROSS: Hello.
I will try to speak into the
microphone as much as possible.
I'd just like to reiterate
everybody's thanks
to the organizers and also
to Jim himself for bringing
this panel together.
I think it's a really
great opportunity.
So basically, my
paper today is going
to tell the story of a
scandal that took place
at one of these moments
of monetary transition
in the French Revolution.
And accordingly,
it is a story that
shows how monetary politics
can be extremely deadly.
So on April 5, 1794, when the
famous revolutionary Georges
Danton was carted off
to the guillotine,
he did not go alone, because
in one of the carts just behind
him were four other
people who weren't
accused of political crimes,
but of financial ones.
These four deputies to
the national convention
were accused, in all
probability incorrectly,
of abusing their
offices by taking bribes
from the directors of a
major financial institution,
the Compagnie des Indes, or
French East India Company.
This affair was the
greatest corruption scandal
to rock Revolutionary France.
And when it was uncovered
by the government,
it was spun into allegations
of a vast foreign plot in which
corrupt deputies,
financiers, and enemy powers
allegedly conspired against
the revolutionary republic.
As this plot subsequently
formed the judicial basis
of the Committee of
Public Safety's attack
against major political
factions like Danton's,
those indictments have led most
subsequent scholars to focus on
whether these people
really were guilty
and whether this
scandal really was
part of a counterrevolutionary
foreign plot.
But I argue that a
more productive focus
is to read this scandal
against the broader
troubled revolutionary
economic climate
in which it took place,
because historians exploring
the economic life of
the French Revolution
have revealed its political and
cultural aspects, specifically
how the use and ownership
of money and property
were seen as constructive
of sovereignty, citizenship,
and identity, like
Rebecca Spang's work.
As revolutionaries
sought to remake France
and its financial
institutions, they
had to reckon with the
problem of the old regime's
extensive debt.
But rather than
repudiating it, they
created a new means
of financing it.
The old regime's reliance on
loans frequently solicited
through the granting
of privileges
to institutions like the
French East India Company
had placed a lot of fiscal
and constitutional authority
in the hands of private
financial actors.
So as the revolutionaries
sought to eliminate
these intermediaries,
they made their debts
repayable with a national paper
currency known as the assignat.
But as the assignat struggled,
institutions like the East
India Company became seen,
not as a method of shoring up
state finances as they had
been under the old regime,
but rather a potent
threat to them,
because while this attack
against the company
had been initiated
by corrupt deputies,
they appealed to a
broader narrative that
called for securing the new
financial regime by eliminating
relics of the old.
So although the
National Assembly
had abolished the trading
monopoly of the East India
Company in 1790, it
continued to trade actively
into the French Revolution.
But the financial situation
of the revolutionary state
was far less stable
due to the creation
of this paper
currency, the assignat,
a currency backed
by seized church
and immigrant properties.
The currency had been a
source of public anxiety
since its inception, as many
correctly feared the assignat's
excessive volatility,
but it nonetheless
became sort of a monetary
embodiment of France's
new order and its commitment
to repay the debts amassed
by the monarchy.
To accept the credit and
value of the assignat
was to display one's patriotic
revolutionary commitments.
And to doubt or challenge it
was a counterrevolutionary act.
So from the perspective
of its advocates,
as the principles of the
revolution were sound,
the causes of the
currency's depreciation
had to be totally
artificial, that is,
the result of some
sort of financial
and political conspiracy.
These supposed conspirators
had another means
of driving down the
assignat's value,
according to this vision.
This was in the
form of speculation
in the shares of private
companies like the East India
Company, because in
the late old regime,
these anxieties had focused
on the trading of bearer
instruments, known as [FRENCH],,
shares that were traded quickly
and anonymously on
paper, providing
ample opportunities for fraud.
And the revolutionaries
increasingly
worried that, as the speculation
continued clandestinely
in these high-value
private instruments
rather than in
assignats, confidence
in the revolutionary
currency would plummet,
giving artificially
heightened values
to instruments ostensibly
worth less than the assignat.
So throughout the revolution,
lawmakers looked at ways
to control and limit these
seemingly irresponsible forms
of stock trading.
And in late 1792,
a series of laws
were adopted requiring
the official registration
and taxation of all
of these shares.
Bearers and their respective
financial companies
were required to pay to register
the ownership of their shares
with a public tax
collector which
would allow for the
taxation of capital gains
and imposition of
financial transaction taxes
to discourage frequent trading.
The shareholders of
the financial companies
demanded accordingly that the
administrations of companies
like the East India Company
act to mitigate or forestall
these regulations, which they
did through a tax evasion
scheme by which the hated
bearer instruments were secretly
registered on the
company's books,
thus seemingly evading the
taxes imposed by the assembly.
Now, this evasion went
unnoticed for months,
as the revolutionary
assemblies never
really attempted to
enforce these laws,
but by the Spring of
1793, the war with Britain
and the radicalization of
revolutionary discourse
raised anxieties
about the relationship
between financial speculation,
currency devaluation, and food
shortages to new levels,
leading some deputies to revisit
these unenforced laws.
On July 9, the deputy
Joseph Delaunay d'Angers
argued that all of the
financial joint stock companies
were working for speculators
at the behest of Britain.
To halt their
schemes, he demanded
the immediate and rigorous
enforcement of the tax laws
which were essential
to force institutions
like the East India
Company to put
an end to these speculations.
As would eventually
become apparent
in the course of
later investigations,
he was speaking on behalf
of a cabal of deputies
and financiers who
were seeking to use
their legislative
pulpit in order
to make a private fortune.
The group had numerous
ties to famous speculators
in the world of the
financial companies,
including one John
Pierre Baron de
Batz, a former deputy to the
constituent assembly turned
counter-revolutionary, whose
involvement with the cabal
later furnished contemporary
Jacobins with grounds
for arguing that this
conspiracy was indeed
one wing of a foreign
plot destined to undermine
the French Revolution.
But the cabal largely sought
to make their fortunes
through a combination of
insider trading and extortion.
By threatening shareholders with
the enforcement of these tax
laws, they hoped to drive
down the share prices.
On their own admission,
the maneuvers
were intended to scare
the bankers, presumably
to render the company's share
prices ripe for speculation
and to signal to their
directors which deputies
held financial power
within the convention
and were thus worthy
targets of bribery.
This dynamic began
to change, though,
upon the intervention of
one final deputy whose
role in the ensuing
events has been fiercely
argued over ever since.
Fabre d'Églantine, poet, author
of the revolutionary calendar,
and collaborator of the
revolutionary Georges Danton,
presented a clear counterpoint
to this earlier approach when
he spoke subsequently to the
convention about the East India
Company because Delaunay and
his associates had largely taken
a moderate stance
against the company,
probably because they were
planning on profiting from
insider trading
in its own shares.
By contrast, Fabre d'Églantine
offered a broad indictment
of all commercial associations
as counter-revolutionary.
It was impossible, he
argued, for institutions
like the East India Company to
remain wealthy and profitable
in the midst of revolutionary
political events
without illegal conduct.
And the high share
value, in turn,
only encouraged more individuals
to speculate in the company
rather than investing
in biens nationaux,
or keeping their assets in
the revolutionary currency,
the assignat.
So enforcing the tax laws
was only ever a half measure.
Rather, institutions like
the Compagnie des Indes
would always foster speculation.
And to stop it,
the convention had
to annihilate them entirely.
So whatever the precise
nature of his motives,
these interventions by Fabre
d'Églantine had the effect
of both focusing
and radicalizing
the convention's attack
on the East India Company.
On August 24, when
the convention
decreed the creation of
the Grand Livre de la Dette
Publique, which was
effectively a centralization
and consolidation of all of
the French State's outstanding
legitimate debts, it also
decreed the suppression
and liquidation of all
existing joint stock
companies, including
the East India Company.
So this impending liquidation
now largely ended any benefits
that the original cabal
might have hoped to reap
by speculating in its shares.
As their later
testimony indicated,
Delaunay, the Baron de Batz,
and the baron's friend,
Benoit d'Angers, a former envoy
to Britain, a key point later,
devised a plot to
profit from the company.
In public, threatened it
with a harsh state-directed
liquidation, demanding
the immediate payment
of the unpaid taxes,
but in private,
the group offered the
company's directors
a much more generous decree in
exchange for personal bribes.
As Fabre d'Églantine,
the former hardliner,
effectively signed
off on this agreement,
it's generally assumed that his
support for it was purchased
through the sharing
of the cabal's spoils,
usually thought to be
somewhere in the realm
of 500,000 [FRENCH] in bribes
from the company's directors.
So the unraveling of this
conspiracy and this bribery
scandal had far-reaching
political consequences
in the Parisian
politics of The Terror.
When one of the
conspirators confessed
that the financial
elites were attempting
to corrupt the
convention, this was
taken as proof of
this vast foreign plot
to undermine the revolution
masterminded by financiers.
And these allegations
were painstakingly
stoked by some of the
members of the original cabal
as ways of sort of concealing
their own culpability.
However, when the
committees began
to unearth proof of the secret
amendments made to these laws,
the entire group was arrested
and thrown into prison.
As all the participants
in the affair
had cogently argued
that speculation itself
was a counter-revolutionary
plot within Parisian financial
circles, the revelation
of their own misdeeds
now suggested that the
same plot reached deep
into the heart of the
revolutionary government
itself.
The outcry over the
actual legislative fraud
of the scandal sort of
dissipated as the Jacobin
leadership instead marshaled
these tenuous connections
to foreign bankers
and financiers
in order to eliminate
revolutionary factions
deemed a threat to the rule of
the Jacobins during The Terror.
So as I began the talk,
in one of the most
heated and controversial
episodes of the terror,
that Dantonists were led to the
guillotine in part based off
of these charges.
So now, while it's
certainly a lot of fun
to speculate about the
motives, identities,
and ultimate guilt of all
of these participants,
this is something of
a fruitless endeavor,
because a lot of the
original documentation
has simply vanished.
And all historians of
political corruption
can readily concede
that it's really hard
to trace something whose
participants intended
to leave no actual traces.
Similarly, the contemporary
Jacobin insistence
on all of this being a vast
diplomatic foreign plot
similarly frustrates
modern attempts
to mine surviving sources
for viable details.
So what I would prefer to do is
to think about it more in terms
of this in comparison with
the other European East India
Companies of the day, because
if we think about that,
the scandal begins to appear
somewhat less remarkable,
because even as the power of
the British East India Company
came under increasing attack
in the late 18th century,
it continued to exercise uncanny
skill at buying influence
in parliament.
From the French side
of things, the scandal
also appears similarly banal in
light of recent understandings
of The Terror as a period
of fundamental weakness
of central state authority.
Moreover, as years of
merchant complaints had noted,
the company itself
was really no stranger
to accusations of corruption,
having effectively paid for
favors under the royal
ministry for a very long time.
So in a lot of respects, I think
what the scandal really shows,
is that in spite of these
self-declared virtuous
Jacobin intentions,
the revolution
inherited a lot of old-regime
ways of doing business.
Associations like the
East India Company,
whose traditional avenues to
influence had been severed,
now sought to
exercise power in ways
that were novel in
newly Republican France,
but had long been the routine
practice of their rivals
across the channel.
So I'd just like to
conclude by noting
one of the other ways in which
I think we can read the scandal,
as being a token of sort
of the monetary instability
of the Revolutionary Period.
Because one of
the other elements
of this attack against
the East India Company
is that it converged with
other newly radicalized
revolutionary initiatives
against old-regime property,
financial institutions, and
debt, because at the same time
as the attack on the
company, the convention
began to invalidate many
other forms of feudal property
owning that early
revolutionary assemblies had
recognized as legitimate.
So this change in perceptions of
the legitimacy of certain forms
of property is really apparent
in the case of the East India
Company, because in 1790 when
the abolition of its monopoly
had taken place, there
was nothing legitimate
about the idea of ownership of
shares in a private company,
but this had
changed by 1793 when
the very institution
of a private company
had come to be seen as a kind
of de facto privilege that
needed to be eradicated in
the new revolutionary order.
Not only had the
company found a way
to benefit from the revolution
without contributing to it,
but its very existence
furnished ways
for bad citizens,
foreigners, and speculators
to undermine the revolution
through the ownership
and circulation of
privately held shares.
These concurrent
initiatives demonstrate
a broader revolutionary
realization,
that the currency that one
used, and by association,
the assets and
property that one owns,
were constructive
of citizenship.
Revolutionaries did not seek
to make property communal,
but to make the
ownership of property
a communal national experience.
The shared usage of
currency like the assignat
and the common purchase of
the seized biens nationaux
fostered, in Rebecca
Spang's term,
a community of believers with
a shared faith in the Republic
and the revolution.
For this reason, another
significant charge
against these venal
deputies at their trial
was the fact that some
of them had supposedly
received their bribes
in company shares,
foreign bills of exchange, or
worst of all, pound sterling.
This charge was
used to illustrate
how these co-conspirators
had put themselves
outside of the
revolutionary community
by denying the value
of the assignat.
This problem was not only an
ideological one, but rather
perceived as materially
necessary to secure
France's new financial order.
Institutions like the
Compagnie des Indes
created to shore up public
credit in the old regime
were seen as
undesirable, problematic,
and illegitimate under the new.
The suppression
of the company may
have been accelerated
thanks to the venal
intrigues of certain
deputies, but it very much
fit a Jacobin narrative
and a Jacobin attempt
to force the conversion
of private assets
into the biens nationaux
that alone benefited
the revolutionary state.
Old-regime officials had
understood institutions
like the East India Company
as a necessary component
of state financing, as granting
privileges to certain bodies
in order to secure loans for the
monarchy from financial elites
was a longstanding
practice of the old regime.
The end of the
East India Company
represented a final
revolutionary attempt
to repudiate this idea.
For this reason, in a memorable
and succinct denunciation,
one of the
co-conspirators announced
before the national convention
that the Compagnie des Indes
greatest crime was, quote,
"that its name recalls
the old regime."
Thank you.
[APPLAUSE]
STEFAN EICH: Thank
you, George is next.
E. GEORGE GALLWEY: Thank you.
OK, so there is a deep
and enduring quarrel
in the American political
tradition going back
before the revolution
over the politics of money
creation and debt management.
And that's probably
not a surprise to you.
The use of credit currency
by the American Colonies
and later by the
Continental Congress
has often been regarded
as only a prelude
to the establishment of
proper modern institutions
of public finance, including
a funded national debt
and a national bank, which
came after the establishment
of independence.
Though the management of public
credit and public finance
are undoubtedly connected to
the issues of nation state
formation, their
attribution to the period
of the American Revolution
is, I'm going to argue,
conceptually misplaced
or misleading.
Instead, the
approach I take here
suggests that debate
over the theory of money
as credit currency in
its practical application
during the American
Revolution should
be viewed through
the lens of empire,
and specifically, our
provincial republican lens.
So in this respect,
I'm sort of thinking
about the range of influences
or the intellectual history,
really, of Colonial
American currency
and how those were
sort of passed on
during the American Revolution.
And by provincial republican
intellectual history,
I'm sort of thinking about the
relationship of the history
of ideas on money
and its circulation
to reflections on
how self-government
in colonial or
provincial settings
could be secured through
strategies of self-sufficiency,
improvement, and invention.
And so the point which had
be made most persuasively
by Christine Desan is
that money as an aspect
of early American
political economy
was very much an aspect of
constitutional politics.
And I think this is sort
of no better illustrated
than in the sort of constant
use of the language of the body
politic to talk about money
in colonial American political
economy.
So as I said, I'm
interested in the range
of sort of ideological
expressions and influences
which helped construct
the political discourse
on money and public credit
in 18th century America.
And the sort of
aim of the paper is
to show the way in
which political economy,
the political economy
of money was removed
from the conception of
constitutional politics
in the late 1780s.
So the early American approach
towards the politics of money
was generally
innovatory, supporting
a democratic, distributionary,
and expansionary theory
of credit currency
at the local level,
remedying the scarcity of coin
experienced by the colonies
as a result of their status
within the British empire.
Early American
political discourse
was oriented towards a theory
of the distribution of money
in ways which could
encourage trade and exchange
was providing for the public
welfare or common good.
In their attempts to
expand the money supply,
early Americans relied upon
a conception of sovereignty
in combination with
a theory of trust
which supported the circulation
of public debt, supplement
hard money currency.
It was the success of these
aspects of colonial currency
finance which, I argue,
allowed for its ideological
extrapolation to a larger
revolutionary republic
conception of public credit.
So modern fiat
money first appeared
in the American Colonies
and 1690 as a response
to the problem of public
indebtedness following
a military campaign in Quebec.
Through issuing bills
of public credit,
Massachusetts
inaugurated a tradition
of supplying credit
liquidity created
in speculative anticipation
of the production
of tangible value.
These paper bills were backed
by the promise, trust, or faith
of the community to redeem
the circulating bills
through future taxation.
When Benjamin Franklin
described the "ancient system
of the British
empire," and that's
a quote, in which the
colonists were, quote,
"left to govern and
tax themselves,"
he was also referring to the
ways in which the colonies had
raised enough circulating
credit on the basis of mortgage
land or fiat currency to
provide for the costs of defense
and improvements in
commerce and trade.
The paper currency
schemes or bills
of public credit
issued by the Colonies
provided some
approximation of the kind
of system of forced
loans put into practice
by mercantile republics
and later utilized
by leagues of states.
Deployed in their
attempts to raise
the sums necessary to
provide for defense,
the instruments of credit
used by medieval and early
modern republics also tied
to their success and trade.
And I think the
interesting thing
about the colonial
political economy of money
is the sense in
which it actually
draws on these previous
precedents of small states
and provincial regimes in
the sort of theorization
of credit currency.
Beginning in 1775,
under conditions of war,
a system of public credit was
mobilized by the Continental
Congress as a machine or engine
to provide for the exigencies
of military expense.
And the sort of metaphor
of the machine or engine
was used quite a few
times by Franklin
in his description of
the continental currency.
At the same time, you
also see John Adams
using the Dutch
revolt, for example,
as a sort of important
parallel of what
the American states were
doing in their rebellion
against Britain.
The continental currency
drew very deliberately
on the practices or system
of fiat currency used
by many of the colonies,
but the historic view
of the American Revolution has
been overwhelmingly oriented
towards a critical account
of the continental currency.
Rather than examine the
important ideological
continuities and
practical adaptations
between colonial and
revolutionary eras
and their approach to
monetary questions,
the focus has instead
been on the chaos
of the revolutionary
era in terms
of the continental currency.
And I'm not sort of trying to
suggest that it wasn't chaotic,
and that there wasn't
sort of a ballooning
of the emission of
dollars or a sort
of precipitous depreciation.
But there is a clear sense in
which the politics of money,
debt, and credit
came to be understood
and very moral and
theological terms,
where the use of fiat currency
issued as a collective debt was
represented by the
political elite as a kind
of original sin, and that the
claims of the political elite
were made ex post
facto in this respect,
that the use of paper credit
currency as the cornerstone
of public credit for
the Confederation
was, from the early 1780s,
people began to discuss it
as a sort of morally bankrupt
strategy which imperiled
American public
credit, and should
have made it much more difficult
for the American states
to borrow.
And so what I
would instead argue
is that, if you look
at the sort of record
of how the continental
currency was first talked about
up until at least 1780 when they
decide to really stop issuing
bills, it was actually
really described
in terms of a sort of
managed bankruptcy,
that the sort of language
used was sort of reflective
of a deliberate
strategy, really,
of using this currency to
pay for the cost of war,
even though it was acknowledged
that there was going
to be a lot of problems
actually redeeming the currency,
and that it would lose
a lot of its value.
So the terms in which the idea
of the continental currency
expressed itself were
primarily the language
of necessity, self-preservation,
and self-sufficiency.
Functioning as a loan
against future revenues,
it was essentially a collective
debt issued by Congress
and the individual
states which would,
in the words of Governor
Morris, "act as a bond of union
between the Colonies."
Called to defend the credit
of the American states
as it became increasingly
apparent that it stood
on tenuous foundations,
both Franklin and John Adams
defended a theory of money,
the continental currency,
as a public utility,
even as the continentals
began to sink in value.
The continental currency
issued by Congress
had operated, in Adams' words,
as "an imperceptible tax."
And integral to this
argument was Franklin's claim
that paper currency,
although inflationary,
involved a measure of
equity in its circulation
by its prevention of
hoarding since the longer it
was held as individual property,
the greater its depreciation.
And so I quote
Franklin here, "it
will operate as a general
tax on the Colonies."
So this is actually a
quote from something
that Franklin published,
and from I think the 1760s.
He uses the same sort of
wording during the late 1770s.
"So it will operate as a
general tax on the Colonies,
and not an unpleasing one.
Perhaps more so than any other
tax that can be invented,
the rich who handle most
money would, in reality,
pay the most tax."
So it's interesting to
observe the ways in which
this logic of sort of
democracy and distribution
in the circulation of
the continental currency
was carried over into
Franklin and Adams' exchanges
whilst they were
diplomats in Europe
over the depreciation of
the continental currency.
So Adams, in his defenses
of the continental currency,
he appealed to, quote,
"the rights of the public
and the justice owed to the
body politic, who having entered
into a covenant with Congress
that the bill should pass
as legal tender, could not
claim depreciated bills
should be repaid anything
beyond their nominal value.
The bills gained their
value through circulation
as a socialized debt."
Adams' point spoke
to a larger set
of issues in the political
economy of public credit
in the American Revolution,
where the philosophy of money
and its relationship
to public credit
continued to draw on a colonial
theory of money, in which money
functioned as a closed system,
manageable and accountable
to the community.
The American
Revolution effectively
cashed in on the
capacities of public credit
as originally theorized in early
American political economy,
where credit money was issued
as a means of providing
one aspect of the physical
infrastructure of war,
but also as a promise of the
sort of commercial prosperity
which could be achieved through
independence from Britain.
So in the
post-revolutionary debate
over the problem
of public finance,
one aspect usually
neglected in favor
of the debate over
congressional powers
to tax and regulate commerce
was the problem or absence
of a circulating currency.
John Witherspoon's essay on
money, published in 1787,
was an important
contribution to the debate
over the theory of money
and its implications
for the political management
of the money supply.
In the years immediately
preceding the adoption
of the Constitution,
arguments Witherspoon
made in support of a
specie-based theory of money
and against the practices
of fiat-based emissions
by colonial legislatures drew on
his Calvinism and common sense
theory.
Both were fundamental
to the case
for ending public control
of monetary expansion
through legislative
initiative at the state level.
The more immediate
cause for publication
was the financial crises
which the United States were
experiencing in
crises which involved
the first armed rebellion
against federal authority,
Shays' Rebellion of 1786.
The rebellion began
after the refusal
of the Massachusetts legislature
to grant tax and paper money
relief.
It was the widespread view of
the political elite at the time
that the rebellion
was an indication
of the intent of insurgents
to abolish property
through economic warfare, their
chosen instrument of anarchy,
paper money.
With the colonial experience
very much in mind,
Witherspoon was most keen to
disabuse the American readers
of the idea that it was
possible to, quote, "arm paper
bills of credit with the
authority of the state,"
for this was an
absurdity and nothing
less than an overturning
of the natural order.
It was this highly-specious idea
which, in Witherspoon's words,
had been reserved for
American legislators, who,
by establishing
nominal value by law,
had extended their authority
beyond its natural bounds.
Tender laws were particularly
pernicious and rob property
holders.
In one memorable
phrase, Witherspoon
described the consequences
of tender laws
as the most ludicrous inversion
of the nature of things,
as creditors were,
quote, "running away
from their debtors,
pursuing them in triumph,
and paying them without mercy."
His attack on the system
of currency finance
was made from the
standpoint of affirming
the mechanism by which
money's value as a standard
must always follow
and accommodate itself
to its value as a commodity.
Most critics of the use
of fiat paper currency
to supplement the money
supply attacked its proponents
for confusing the nature
of wealth with money
and for misunderstanding the
natural mechanism by which
money gained its value.
This meant that, quote,
"it must rise and fall
in price according
to the quantity that
is brought to market compared
with the demand there
is for it."
So those are
Witherspoon's words.
More money bought into a
country by increasing industry
and profitable
trade will mean, not
more money or a richer
society, but rather a rise
in the price of
commodity and wages.
The latter point has
often been repeated
in the critical responses to
colonial monetary policies
aimed at remedying
the complaints
about the scarcity of coin.
It was always easy to castigate
the colonial use of bills
of public credit
for misunderstanding
the basic functions of money.
Witherspoon described arguments
on the scarcity of money
as a, quote, "radical error,
supporting those absurd calls
for an increase in
the circulating medium
to aid industry and to
alleviate the distress caused
by a want of coin."
It was a category
error to imagine
that the circulating medium in
a state equated to its wealth.
The circulation of that,
quote, "indefinite quantity
of precious metals made use
of among the nations connected
in commerce," end quote, was not
owned by any particular nation,
but found its level
or circulation
in any particular
state in keeping
with the degree of
industry and productivity
appropriate to its population.
The production of commodities,
according to Witherspoon,
must be the effect of
industry and private interest.
He referenced the work and ideas
of David Hume in this respect.
Industry was one of
the cardinal virtues
that Witherspoon sought to
encourage and cultivate.
His lectures on moral philosophy
exalted the popular virtues
of industry, sobriety,
frugality, and our economy
as essential to republican
character and Christian morals.
But it was clear from
the essay on money
that he saw the
capacity for industry
as undermined by the tendency
for political corruption
and as a strategy for the
appropriation of property
by overly democratic
legislators.
By the mid 1780s, Witherspoon's
emphasis on industry
was symptomatic of
the increasing belief
that the virtues
of industry were
being lost in favor of the
expropriation of property
from wealthier Americans.
In the early 1780s, with
an increasing emphasis
placed upon the need for
both national and privately
chartered banks able
to provide liquidity,
public debate shifted
towards a discussion
of the kinds of
institutional arrangements
which could secure a
paper bill's value.
In Witherspoon's argument,
paper credit currency
which acted only as a sign
not a standard of value
could not perform the
functions of money.
This claim was used to
rule out fiat-based money,
but it was not made with
the intention of ruling out
the use of paper currency
issued by private banks
or corporations using a
fractional reserve system.
In this situation,
Witherspoon claimed
that paper currency, while still
producing negative effects,
was useful, quote,
"in facilitating
commerce both internal and
external to the United States."
Rather than carrying
large amounts of coin,
paper in the form of
bills of credit or bank
notes ease, quote,
"mercantile transactions."
Equally, as
Witherspoon observed,
there are many people
whose industry--
sorry, this is a quote again.
"There are many people whose
industry is damped or limited
by want of stock or credit,"
so that in extending credit
or in anticipating
real property,
a paper circulation
could provide a service
to the individual and community.
Yet the implication
of this claim
on the extension of
private circulating credit
was made with a view to
its limited circulation
rather than to increase the
sum of money in circulation.
This cut against
the notion which
had dominated the colonial
and revolutionary argument
on monetary circulation,
that its wide and egalitarian
circulation was essential
for the longevity of the body
politic.
For many, the direction
of the argument
on the distribution of
property from the early 1780s
favored, in the words of Robert
Morris, quote, "distributing
property into those
hands which could
render it most productive."
So in the context of
his claim that money
had to function as a
universal medium of commerce,
Witherspoon was exactly
right that fiat money
issued by colonial legislators
and later by the Continental
Congress had not been issued as
an acceptable means of payment
for foreign transactions.
Instead, they were purely
domestic obligations, often
tenable only at the state
level, and largely consistent
with the kind of strategies
of self-sufficiency
which made the political economy
of the revolution put forward
as a solution to isolation
from international trade.
When Witherspoon
reviewed the record
of the use of fiat currency
issued by the Continental
Congress, he regarded
it as a strategy
of war justified by
the rights of necessity
and the law of nations.
In his review of the practices
of colonial legislatures
who had issued
fiat money as part
of the privileges of governance,
he invoked Franklin's testimony
to the Board of Trade, to
the British Board of Trade
that their operation
had contributed
to the growth and
improvement of the colonies.
Yet he regarded the success
of these arrangements
as a product of the land
banks or loan office
rather than the
legislators themselves.
Both Witherspoon
and Benjamin Rush
saw the call for the
revival of loan offices
as driven by the needs of
land expansion and settlement,
and therefore to some
extent legitimate.
This was the
distinguishing feature
of the American economy, which
made the debate over money
and its terms of
circulation fundamental.
Rush considered the
political economy
of the loan offices
issuing credit
in the form of
paper currency to be
a relic of dependent colonies.
Loan offices should be
established, but only
in issuing specie, for he
considered paper currency to be
a fatal cause of
Americans' indebtedness
to European powers.
Rush inverted the
basis of the system,
arguing that it was only
the ocean of private credit
which could provide a fund
large and stable enough
to provide farmers.
Rush ruled out the
issuing of paper currency,
even supported by specie.
The former system of
public credit operating
in the colonies
before independence
was based on short-term
public debts.
And he described it as the pap
breast milk of feeble colonies.
Yet as Witherspoon and
Rush had, acknowledged
the colonial model
of public credit
had provided a means
of channeling credit
to those who could not
otherwise obtain it privately
for the purposes of
the improvement of land
and property.
So I know I'm going over time.
Can I just finish up the
next couple of pages?
OK, so Hume was well-known for
having provided an analysis
by which a nation's
money supply would adjust
in relation to its
comparative level of output
with other states
with which it traded.
In this respect, Witherspoon
clearly concurred with Hume,
using the idea of monetary
flow in relationship
to prices to reject American
claims of monetary scarcity.
Hume's essay of money
contained a suggestion
of the providential nature or
happy concurrence of causes
in human affairs which
allowed poorer countries
to still compete with
richer ones due to the lower
costs of labor.
It was this fact which
provided Hume with doubts
over the benefit of
banks and paper credit,
for even as an increase of
trade and money, he said,
meant raising prices, it
was better for a state
to gradually adjust than to
initiate monetary expansion,
quote, "increasing money
beyond its natural proportion
to labor and commodities."
Hume was especially
anguished anxious
that governments avoid using
the tools of monetary expansion
through public debt since
he saw this facility
as containing no natural
mechanism of limitation.
For Witherspoon, it
was providential,
a matter of God's own
creation, that all desired
attributes of a monetary medium
were found in precious metals.
Witherspoon's
strong condemnation
of the issuing of paper
currency by state governments
was very much in keeping
with Hume's injunctions
on avoiding the politics of
debt and monetary meddling.
Following Hume,
Witherspoon's essay
provide an influential
analysis of why
the powers of money,
debt, and credit
should be removed as a
desideratum for governments.
Witherspoon had analyzed
the problem of public trust
at the domestic and
international level
as a consequence of the
abuse of popular sovereignty
by state legislatures
in issuing paper money.
The trust which was
necessary for the operation
of commercial
conventions like money
was incompatible with the powers
of state assemblies, which
might imperil property rights.
OK, so in conclusion, it was
Madison who specifically--
ah, no, sorry, I should say
that Madison was actually
Witherspoon's student.
It was Madison who
specifically associated
the policies of debtor relief
laws, including paper money,
as, quote, "aggressions on
the rights of other states,
both domestic and foreign."
He described the failure
of moral imagination
on the part of, quote, "an
ordinary citizen, or even
an assemblyman of Rhode
Island in estimating
the policy of paper money," in
what light the measure would
be viewed in France, or Holland,
or even in Massachusetts
or Connecticut.
Driven by pure and unenlightened
self-interest, not even
religion could restrain
the impulse of debtors
to defraud creditors.
Only individuals of extended
views and of national pride
were able to understand
the ramifications
of the misuse of public credit.
Drawing on Amir Vitale, and
those authors who put forward
a view of public finance as part
of a reformed modern commercial
intercourse between
nations, Madison
viewed the removal
of the powers to emit
paper money as a central
condition for a stable union.
And in this way, he drew very
much on Witherspoon's essay.
In the eyes of the
political elite, those
who favored
constitutional reform,
the Confederation's
failures to provide
for the repayment
of the war debt
were not merely failures
of internal governance,
but an inability to
uphold those duties
consistent with
the law of nations,
with civilized
nations not apparently
at war with each other.
These were
prerequisites, according
to Madison, to
commercial opportunity,
as well as emblems
of national honor,
virtue, and membership
in the civilized world.
As the conflict
over the recovery
of British private debts by
hostile state legislators
attested, the status
of the law of nations
for the conduct of foreign
relations, including commerce,
was ideologically imperative
for the political elite.
[APPLAUSE]
STEFAN EICH: Thank you
to the four panelists
for four fantastic papers.
We're going to move
over to questions,
but just looking
around, I want to say
thank you to Chris
again, because it's
pretty humbling to be in the
presence of this kind of group
of people.
I mean, it's
really, it's a dream
to have to have
this kind of crowd
for a panel on
18th century money.
[LAUGHTER]
And Chris really deserves
a lot of our thanks
for putting all this together.
So I just want to echo
what the panelists said.
And I'm just stunned and
humbled by being in the presence
of this audience.
So over to you and questions.
Yes, [INAUDIBLE]?
AUDIENCE: OK, so I have a--
so we were asked
in the last panel
to consider the question
of what kind of economy
the financial system
is meant to serve.
And I think that when we
consider especially, well,
all of these contexts,
but early American Andrew
money as an example,
these questions
are really lying in the
context that we're looking at.
So I have a question
for that George
might be able to
comment on that as well.
But basically, it's
a question about who
really wanted this
kind of money that
was meant to self-destruct
to revert to [INAUDIBLE]
non-monetary wealth.
I mean, you gestured
to the idea that it
was meant to serve as
sort of [INAUDIBLE] class.
And I know that in
all of these cases
where colonial paper
money was issued--
and I know that
your case focuses
on continental currency,
but I'm interested in some
of its precursors.
In all these cases,
there were really
deep divisions in
colonial society
over what kind of a common
people wanted to see.
And there were
really deep divisions
in [INAUDIBLE] over what
money should look like,
and whether it should be a
permanent circulating currency,
or something temporary
meant as a stopgap measure
to deal with war time debt and
then to be sunk and burned.
And so I see your story as
just one side of that debate,
and Pennsylvania
as maybe an example
where the other side wins
out, where, yes, those paper
bills are sunk, but
they're completely
replaced with even larger
issues of more and more paper
currency that's
meant to serve sort
of a large range of transactions
over a long period of time
for the population
of the colony.
So yeah, I guess
I just am curious.
Do you really see
the approach to money
that you've laid out as the
American one, the temporary,
the money to burn approach, do
you see that as a consensus?
Or is that--
I guess I just wanted
you to, if possible,
talk about those conflicts.
ANDREW EDWARDS: That's
a really good question.
I've struggled with this when
talking about paper money
in the American context
for a long time,
because on a certain level,
I think a lot of us who study
early American money and who pay
attention early American money
like to see it as this
sort of liberatory project.
You know, it's a
project of a bunch
of people who got
together and made
their own money in the absence
of the imperial money which
they didn't have.
And that feels like
something pretty good.
But you have to realize
on a very real level
that this was the political
economy of slavery.
The people who
put this together,
and particularly the
people who are advocating
for that money being burned,
so the money being temporary,
were the people who owned the
other forms of physical wealth
which actually dominated
colonial society--
so slaves, land,
mercantile capital.
And to all of those
people-- some of them
might want money, this,
that, and the other.
but in general, the notion
of an existing, like,
a moneyed capital, a
money, a permanent money,
a permanent form, money as
a permanent form of wealth
was going to destabilize
their sort of place
in colonial society.
So it's really important.
I think-- yeah, so
that's the answer.
And this is from
Alice Hanson Jones.
You see the distribution of
wealth within the colonies,
and the tiny, tiny, tiny
percentage of cash involved.
So it's these people--
sorry, the people who
own slaves and servants,
the people who owned
land, who owned
these producer
[INAUDIBLE],, those
are the people who this
money was meant to serve,
or who the burning specifically
was meant to serve.
AUDIENCE: And then just
on the flip side of that,
I think a lot of the people who
wanted a permanent circulating
currency were trying
to start manufacturing
industries and [INAUDIBLE].
ANDREW EDWARDS: Yeah, over,
and over, and over, and again,
other people advocated for it.
But I think part of the reason
that at the end of the day
they failed, over the course
of the colonial period
anyway, was because
these interests won out.
STEFAN EICH: George?
E. GEORGE GALLWEY:
Yeah, I mean, I
think you make a really
important and essential point,
and that clearly, the
connection to slavery
is really fundamental.
But just to qualify it,
I mean, to some extent
I think that there really is
also a language of welfare
in there too.
And I think that's an
important aspect, because
for so long, we-- you know, for
a long time, we've associated,
especially in the context
of America, the sort of rise
of finance as being
really an elite project,
and one, I think,
went into sort of
like a fiscal military state.
And I think that,
actually, when you
look at certainly the
intellectual history of money
that I do, you see a really
very different project
at the heart of it
too, and one that
actually, as Jim was
talking about, is Atlantic.
To look at it purely in
the context of, I think,
the American Colonies
would be wrong.
I think there is a
circulation of ideas going on
about the circulation of
money which is very much,
in a sense, anti-hierarchy.
And on the question of the sort
of longevity of this money,
I mean you also see the attack
made by people like William
Douglas-- and you read his stuff
on the history of the American
Colonies' currency.
He's really worried that
the circulating paper credit
currency is going to turn into
a long-term public debt right.
And that's what he's-- the
reason he is actually really
concerned about that is because
he thinks that that will mean
that the American Colonies have
a larger claim to statehood,
or will have a claim
to statehood, rather,
and that that therefore could
be a sort cause of a kind
of revolutionary sentiment.
So I think that there
is that aspect too,
that really, it is seen as
being a kind of expression
of sovereignty to be able
to issue money as debts
or to be able to
issue money at all.
So you have those,
I think, aspects
which need to be thrown
into the picture too.
STEFAN EICH:
Rebecca [INAUDIBLE]??
AUDIENCE: Yeah, this
was going to sound more
like a comment than a question,
but it built so well off this.
And I will come to a
question as soon as I can.
So I'm really struck by
George and Andrews discussion
of the continental
credit currencies
as necessary to get
us through a crisis
and perhaps to fulfill an
important welfare function,
and that idea that you create
a money for a period of crisis
is, of course, the way they
talk about the assignat.
The assignat are the
savior of France.
And there were also public
burnings of assignats, right?
They are meant to
be revolutionary.
And the revolution isn't
supposed to go on forever.
We're going to get
to the end of this.
And then we'll have
some sort of stability.
So then I was also thinking
about Chris' initial discussion
about the Greenbacks,
which also exist
for a specific period of time
and fulfill a certain purpose.
And I was thinking, in
all three of those cases,
how our picture of
them as irresponsible,
chaotic, disastrous, are
stories written in retrospect
by creditors, which reminded
me very much of Julian Hoppit's
excellent article on "The Myths
of the South Sea Company,"
where really, not that
many people are ruined,
but a few really angry people
produce this story about it
being a ridiculous bubble.
So then this is where we get
to question and the relevance
of this to a empire panel.
I was also thinking about
Michael O'Malley's book Face
Value, in which he
talks about the creditor
reaction against the
Greenbacks, the gold bugs.
You say something
has intrinsic value.
The proponents of the idea of
gold having intrinsic value
were also the political
voices after the Civil War
that opposed reconstruction
and said that people
have intrinsic value.
And it's chiefly
white people who
have lots of intrinsic value
and some other people who
don't really have
very much at all,
so that this idea
of intrinsic value
is, at least of the aftermath
of the American Civil War,
a racist idea.
And so I was wondering about the
sort of racial politics of all
of these short-term monies,
and whether we can sort of
read that analysis which is,
from a very specific point
in American history,
bad, and think
about it in an 18th
century context,
or if the issues around
race are just so different,
it's not going to quite segue?
E. GEORGE GALLWEY: Did
you want to get this?
ANDREW EDWARDS: Oh, feel free.
I'd be happy.
E. GEORGE GALLWEY:
Yeah, I mean, so I
think your point on sort of the
way in which currency is looked
at retrospectively,
the history of currency
is really important.
It's sort of what I was
trying to say in the paper,
but it was a bit garbled because
I was running out of time.
Or maybe it's just
garbled, I don't know.
I think that really
is the crucial, one
of the crucial points here, is
that the way that the history--
I mean, as I was
writing my dissertation
on public credit in the American
Colonies in the 18th century,
I realized I really
should actually
be writing a dissertation
on the history
of the histories
of the currency,
because that's really
really, fascinating.
I mean, and so I think that
has this sort of retrospective
judgment which very much came
from a very interested place,
has a lot to say about
how we understand
the history of
currency at this time.
On the question of race and
ethnicity, I think this is,
again--
I mean, Franklin is a really
good example here of that,
because he is the most
important theorist really
of colonial and
revolutionary currency.
His desire to see the
expansion of the money
supply he was very
much to do with wanting
to enable the expansion of land
and settlement in the colonies.
He has a really interesting
idea of a fiscal union
between the colonies
and the mother country
that he writes in the 1760s.
And it's very much
in racial place.
It's that he wants to discourage
a certain kind of land
and settlement by a
certain kind of people.
And he does want to
discourage slavery.
And he really wants a sort
of British Anglo-Saxon types
to come to America, use the
paper money to buy tools,
buy land, and improve it, and
expand the frontier, basically.
So from that point
of view, it sort of
fits into his understanding
of demographics
and political economy very much.
ANDREW EDWARDS: That's a
really fantastic question.
And that's a really interesting
book, O'Malley's book.
I think that, I mean,
the way I thought
about the colonial period
to a significant degree
is that, it's a society that
doesn't have very much money.
It doesn't have any
financial instruments.
And one way you can
read that economy
is that, when you don't have
finance, you invest in people.
And because the thing
that really matters
is the ability to
command the labor
sort of within that society.
So that can mean
investment in slaves.
It can mean buying
slaves, buying people
in order to move them around.
It can also mean
investing in putting debts
on your neighbors.
Like, a merchant in a northern
seaport might do that.
So they would build
out these vast networks
of people who owed them
so that they could command
the goods that they were
going to need to sort
of deal in the Atlantic trade.
And I think that when you
get into the 19th century,
you can see a very
similar dynamic happening
in the American South, in the
sense that these people who
are very much invested
in unfree labor
are simultaneously
sort of necessarily
invested in an economy
that does not privilege
the monetary wealth that's
being produced by Northern banks
in the same period.
And they attempt to
eliminate it over, and over,
and over again throughout
the Antebellum period.
I think that's
sort of the dynamic
that you see playing out in
a post-Civil-War context,
you know, O'Malley's book.
E. GEORGE GALLWEY: Can
I just add one thing
that I forgot to say?
Also, I mean, we
shouldn't forget the fact
that a lot of this
colonial paper money
is being used to fight wars
against Native Americans.
So that's another aspect.
ANDREW EDWARDS: Yeah.
STEFAN EICH: Can I just
actually extend this question
slightly to Elizabeth?
I was wondering how the
abolition of slavery
plays into the background of
the East India Company scandal
that you talked about
and also whether there
is another dimension
about minorities that
plays through the
suspicion of speculation
being linked to foreign agents?
Is this an anti-Semitic
trope at the time?
In what ways is it
linked to foreignness?
ELIZABETH CROSS:
It's unquestionably
a xenophobic trope.
I wouldn't say that
it was specifically
either anti-Semitic
or driven by racism.
It was xenophobic
in that it was--
they were mainly concerned about
British agents, Dutch agents,
Austrian agents,
Prussian agents.
It never really plays in to
any of the kind of stereotypes
that you're describing.
The relationship
of the abolition
of slavery to the East
India economy in the 1790s
is kind of a difficult
question actually,
because at this point, the East
India Company, the Compagnie
des Indes, does not have
specific investments
in the Atlantic economy.
They do not control the Atlantic
or Caribbean colonies the way
they did in the earlier
part of the 18th century.
So the two worlds in many
ways are more disentangled
than they ever had been before.
That said, I think we
might be able to think
about the moments of 1793
being in some ways a very
anti-colonial moment
precisely because the Haitian
revolution is underway
in the Atlantic World.
And there is this
deep-rooted skepticism
in Jacobin politics of
commercial interests in general
as potentially entangled
with these foreign agents
and whatnot, bringing
counter-revolutionary forces
into France.
And I think that's
where the connection is.
It's on more of an ideological
level than specifically
financial one.
STEFAN EICH: Did you have a
question specifically on this?
AUDIENCE: Yes.
STEFAN EICH: OK, why
don't we take yours first.
And then we can go to
[INAUDIBLE] afterwards.
AUDIENCE: Speaking of
currency as being outside
of just monetary money,
getting into flesh currency,
I am interested in how
that worked within--
I mean, I know
people [INAUDIBLE] it
was difficult to have monetary.
I'm just interested in how
did flesh currency work?
Like, how were people able to
really trade flesh and make
it work as money in America,
in Great Britain, and what not?
Because I know that slavery
it's just talked about as like,
my people were
picking or whatever,
but just am interested
in how that became--
how my ancestors'
flesh became currency.
How did it make wealth?
And if you can
give me any reads,
any books that I can look
up to find out more--
and this is for
everybody, because I'm
interested in the
Haitian revolution.
I'm half Haitian,
half Mississippian,
so [INAUDIBLE] thank you.
ANDREW EDWARDS: I mean,
there is a vast literature,
but we can take it off--
AUDIENCE: [INAUDIBLE]
ANDREW EDWARDS:
Huh, oh, [INAUDIBLE]
gosh, I'm not really
sure where to start.
E. GEORGE GALLWEY: It's a bit
like being on general exam
again, isn't it?
ANDREW EDWARDS: Huh?
Yeah, exactly.
ELIZABETH CROSS: A good survey
book on the Haitian Revolution
is Avengers of the New
World by Laurent Dubois.
That would be sort of a
basic primer on the mechanics
of the slave economy
and then what happened
throughout the revolution.
JAMES LIVESEY: But
on the fiscalization
and financialization of
race, that collective volume
that Sven on slavery
and capitalism--
ELIZABETH CROSS: Yes.
ANDREW EDWARDS: Sure, yeah.
JAMES LIVESEY: --some really
good articles in there.
ELIZABETH CROSS: Yeah,
Slavery's Capitalism
edited by Sven Beckert.
AUDIENCE: And some other guy.
[LAUGHTER]
ANDREW EDWARDS:
And Seth Rockman.
STEFAN EICH: OK, let's move--
AUDIENCE: Wait, but
the other guy-- there
is very easy answer to this
question and you all should
[INAUDIBLE],, which is simply
that as bodies with prices,
enslaved people serve as the
basis of a credit system.
And in an economy
in which everyone
is borrowing, what
you do to secure
that debt is not
necessarily to explicitly
collateralize enslaved people,
but to know that you can always
call the Sheriff and
put a person on a block
and get your money that way.
And that's the basis of
slaves becoming money.
JAMES LIVESEY: And that,
that is exactly right.
And that's one of the
reasons that the issuance
of paper money starts to
be an emancipatory project
for a lot of people.
So people like Tucker
argue that in as much
as the capital of the North
Atlantic is embedded in people,
it is necessarily dominatory,
and thus, public credit drives
war, empire, and slavery.
In as much as you
issue a currency,
no matter how you
do it, you thus
create the possibility of
internal development projects
which are not so dependent
on external trade in order
for the nation to survive.
And that therefore means
that you are not committed
to slavery, war, and empire.
So those two things cross there.
STEFAN EICH: Great, we
have Bob [INAUDIBLE]..
AUDIENCE: Great,
so I wanted to know
what appears to
be a practice that
has a certain parallel
to money burning,
and then it was a
question in connection
with that apparel parallel.
So the parallel is this.
It apparently used
to be something
of an institution
in American society
to hold a mortgage burning
party once you had paid off
your mortgage of your home.
I don't know exactly
when this died out.
It seems to have been
some time around the 1950s
to 1960s, but [INAUDIBLE].
And of course the parallel to
burning currency or burning
money is quite striking.
Now, the question
[INAUDIBLE] that connection
is that, the reason for that
the institution of the mortgage
burning party seems to have been
that people didn't want to feel
obligated to others for any
longer than they had to be.
So were out from under
a debt obligation.
And you celebrated it
by burning the artifact,
or the symbol of
that obligation,
basically signifying
your freedom.
Now, so here is the question.
That seems to me to suggest
then that any kind of debt
instrument, circulating
or otherwise,
is viewed as a
problem, something
that you don't want
to be subject to.
And that suggests a certain
kind of individualism,
I suppose, or a kind of
anti-solidaristic way
of thinking from
one point of view.
And that is that, if
you think about it,
solidaristic
thinking is thinking
pursuant to which we all
are in a sense obligated
to one another, that one doesn't
view one's being obligated
as a source of impoverishment or
as something that's unpleasant.
One actually celebrates the
fact that one might be obligated
to others, at least
provided that there
is some symmetry when it
comes to inter-obligatedness
among people who
constitute a society.
And so I guess
I'm wondering then
if the practice of
currency burning
might be viewed as having--
kind of going hand in glove
with that kind of
libertarian way of thinking
or individualistic
way of thinking,
which was in a way
anti-solidaristic
because it was
anti-obligatedness.
ANDREW EDWARDS: That's of
course the exact argument
that Alexander Hamilton made
regarding the national debt,
you know, that it was going
to bind people together.
And many people
made that argument
over the course of the period.
That's actually
exactly the point
that I was trying to
make, and actually
that [INAUDIBLE] raised,
that in a sense, burning
the money was a way of
getting rid of the bond
that the money represented.
And I actually
argued in the paper
that I thought of Americans'
Colonial currencies
as sort of a mortgage
voucher, in the sense
that when you paid them off,
all you did, you didn't get--
when you paid them in in taxes,
the state didn't get anything.
You didn't get anything
except for the fact
that all of the property
that could conceivably
be sold if you didn't pay
those taxes, that lien
upon that property was removed.
So you were suddenly
disobligated to the community.
So I think that's
really interesting.
AUDIENCE: Yeah, it's
potentially disturbing, right?
It's sort of like everybody
throwing away their wedding
rings or something.
E. GEORGE GALLWEY:
I mean, I think
I would dispute the
extent to which they--
I think there is
a solidaristic, I
think there really is a
solidaristic argument,
actually.
I mean, if you read
[INAUDIBLE] for example,
he writes an essay on paper
currency where he is saying,
you know, we're not
followers of Hobbes.
We really actually
do believe that--
I mean, it's Christian claim.
we really do believe that
we should love each other,
and that this paper currency
circulates because of that.
And that claim
continues to get made
throughout the course
of the 18th century up
until the American Revolution.
It's one of the
reasons that the French
think the continental
currency is such a success,
because I actually did bind
citizens of the Union together.
And it did actually act as
a sort of proto-nationalism
in some respect,
not that I'm saying
nationalism is a good thing.
But certainly, in the context
of the American Revolution,
that's one of the ways in
which continental currency is
theorized.
So I think that it's paradoxical
or at least contradictory
in the sense that
it's both solidaristic
and anti-solidaristic.
It's the Republican
versus Liberal debate
in a sense that's going on.
ANDREW EDWARDS: I
very much agree.
Those two impulses are
very much in contradiction
just built and actually
into the institution itself.
STEFAN EICH: I mean, it seems
hard, far removed from us,
but finance comes
from the French finir,
something that ends, exactly.
[INAUDIBLE]
AUDIENCE: Thanks, this
is a fascinating panel.
And I'm really loving the
metaphorical exploration
of burning and its
historical role.
And I'm curious to compare
that with what we're talking
about in the United Kingdom.
You were talking about
money enduring there.
And obviously, at
some physical property
level of certain
instruments, there
might be a level of enduring.
And I'm curious if you think
about that, conceptual kind
of budgetary layout.
I mean, think about
today for example,
where almost-- most
money is virtual.
The treasury still
has a general account
that has a positive value
that gets topped up.
But if it doesn't get
topped up and there
needs to be
borrowing, securities
get issued, et cetera.
But that whole process
still effectively involves
deleting tax money on
one side and issuing
new money on the other.
If there is an imbalance, we
do this complicated public debt
stuff.
But those two functions don't
have a direct relationship
to each other.
So I'm curious, in the UK, is
it primarily about endurance
of the physical instruments?
Is it something about
the way that idea affects
budget policy more generally?
Or is that really
a fiction where
there is a sort of destruction
and a creation, but narrative
links them in a way
that's symbolically
different to the burning,
where the burning is sort
of every time you
wipe the slate clean,
and therefore we're
coming back to the table,
whereas this has a continuity
of some pre-existing political
commitment that isn't
necessarily grafted
one-to-one with the physical
aspect of the endurance.
So I was just trying
to separate out
the endurance of the concept of
the capital stock or the debt
stock from the endurance of--
ANDREW EDWARDS: Of
the physical thing.
[INTERPOSING VOICES]
ANDREW EDWARDS: I
mean, I think it's
an ideological notion that
money is enduring more
than anything else.
What you're describing
about the current UK
version of creating money
and destroying money
I think has a lot more
in common in a sense
with the American version,
except for the fact
that it's constantly rolling.
And the American version--
AUDIENCE: The Pennsylvania
example, though--
ANDREW EDWARDS: Yeah,
the Pennsylvania example
is much better.
In a sense, the
American monies were
designed to end, period,
full stop, at some point.
Of course, they
never really did,
but they were designed
to sort of work that way
while the British monies--
I mean, the interesting thing,
it's very striking to me
that they thought of the
money pre-existing outside
of the state coming
into the state,
going back outside to the state,
but the same money continues,
and continues over time.
And that's very,
very different, I
think, from what the
Americans were doing.
It'd be really
interesting to track
how that transformed to their
current fiscal policies.
STEFAN EICH: A question
from over there.
Sorry, I don't know your name.
AUDIENCE: Yeah, no,
Caroline [INAUDIBLE]..
I just wanted to get
I haven't formulated
this quite into a question yet.
But I kind of want to see--
I think the reason that
mortgage is not solidaristic,
but anti-solidaristic,
is because of,
think of the expression of
mortgaging ones' future.
Mortgages may tie you to other
people in society through debt,
but they break your
tie to your heirs,
because they take
your inheritance away
and they break the
transfer of money.
And so why is that
significant here?
I mean, I think first, it raises
the significance of the family
as a particular community.
I think in terms of
citizens versus state,
the the families
are [INAUDIBLE],,
but the way that I want
to ask the question to you
guys is about the issue that
raises as money is establishing
a relationship in time.
And I think, in a moment
of revolution, that's
particularly important,
the ability of money
to establish a relationship,
or a credit of debt
to establish a relationship
with the future,
and the extent to
which I guess that may
raise a particular anxiety
about monetary [INAUDIBLE]
in revolution.
Again, this is [INAUDIBLE] with
respect to this conversation.
I haven't framed
up the question.
So I wonder if maybe
that's something
you may want to
comment on, thinking
about that relationship of
time, how that would fit
into this story about
regimes, and money,
and revolutions in
particular [INAUDIBLE]
18th century as being one
of [INAUDIBLE] but also
[INAUDIBLE]?
STEFAN EICH: Maybe
the French side has
something to say about time.
JAMES LIVESEY: I'll go back
then before we go further.
I mean, if you think
about the great inflation,
so you know the influx
of silver into Europe
in the 16th and 17th century
with provokes inflation
which goes beyond
that silver account--
so we are when we get the
creation of these funny money
instruments, it
precisely is that there
are activities that we don't
have the money to represent.
And the circulation
of money, the velocity
of the relationship of money
isn't going quickly enough.
Now, the entire point of the
late 18th century revolutions
was supposed to be the
extirpation of poverty.
And that was conceptualized
as finding a solution
to the collective action
problems through which
individuals who had
needs and others who
had means satisfy those needs
could link up with another.
They were supposed to be
re-described as rights, right?
That's the idea--
August 1789 thing.
So you re-describe everybody's
property as rights.
That makes them calculable and
communicable one to the other.
Thus, a natural equilibrium
will emerge which
will be represented by money.
And that's the way the
assignat is supposed to work,
that the assignat just sits
on top of a rights regime
as an almost transparent
instantiation of what
the future achieved value
which is latently there.
So the anxiety you
speak about of course
occurs when that doesn't happen.
If your whole series of
expectations, that if we simply
did away with the impediments to
understanding value as rights,
that if that triangle,
my rights property value
was put in place,
then the system
would naturally
stabilize itself--
then what?
That's when I think
these kinds of stories
then-- because then somebody
must be doing something wrong.
ELIZABETH CROSS: Exactly.
Yeah, I mean, it shows
how much financial choices
are linked to some sort
of political prediction
of a certain kind of future.
So in 1793, if you
have all of your money
in East India Company stock
rather than in assignat
or in biens nationaux,
it's assumed
that that means some
sort of-- you're
forecasting a political failure,
effectively, of the revolution,
of the republic.
And you're instead forecasting
the commercial rise
of certain private
bodies in comparison.
So I think that's sort
of the transition in time
that you're talking
about, this idea
that every financial
choice involves
your own forecast in some ways.
And if you're making the
wrong forecast, at least
by the state's conception,
that's really problematic.
AUDIENCE: I don't really
care that much about money.
[INAUDIBLE]
[LAUGHTER]
And I'm thinking how should I
understand what you're saying.
Should it be about
nation building?
Should it be about
individualism?
Or should it be about some
concept that would bring
both these ideas together?
STEFAN EICH: [INAUDIBLE]
JAMES LIVESEY: Well,
the fundamental unit
you're asking there is,
what's the unit if you--
the unit of which
the society is?
What I would suggest
is that nation
is conceptualized
as the response
to the problem of empire.
So nation is not ethicized
or any of that stuff.
It's that, if we had a naturally
occurring political unit, which
would be a nation, which is
a group of persons living
under the common law
who solve one another's
economic problems,
who meet one another's
needs, that's the
alternative empire, which,
while a lovely
idea, has turned out
to be nothing other
than looting, robbing,
and enslaving people.
I suppose one of the--
is when you get into
the French side of it,
what you're looking
at is, is then
of a universe of
creative failure,
that the nation is a
brilliant idea conceptualized
in that fashion,
but it turns out
that when you
create nations, you
get 15 years of
European war which
have been worse
than any other war
that you've had in
the 18th century.
So this is constant frustration
of an anticipated outcome.
Oh, we have nations.
Therefore, we will
now be a peace.
You've got [INAUDIBLE] and
his mates wandering around.
And actually what
we're going to do
is save everybody's
people against
their fearful oppressors
by invading them all.
ELIZABETH CROSS:
Well, and it also
just shows how the process
of creating a nation
state within an
imperial framework
is really problematic,
because you
have all of these strange
transnational institutions
that were created for the
purpose of a global empire that
suddenly no longer fit
within the dominant discourse
of the nation states.
And that's where
you start having
these kinds of contestations
about who owns what
and if it's legitimate.
ANDREW EDWARDS: And I mean,
as a matter of history,
and over the 19th century
in the United States,
people are arguing
back forth constantly
over what the notion of
money is meant to be for.
Is it meant to serve the people?
Is it meant to serve a
Midwestern grain farmers?
Is it meant for a
New York banker?
Is it meant to
serve this broader
notion of a global free market?
What is it for?
So this is, I mean, it's an
inherently political problem
that you raise.
AUDIENCE: Can I
just ask you, James,
to extend what you said a moment
to ago into the other direction
towards the provinces?
So if this is a
panel about empire,
it means in the
18th century, this
is not an age of nation
states, but these
are imperial projects.
But in some way what
James [INAUDIBLE]
is let's flip it
around and says,
that also means
internally, provinces
are much more important than
we kind of think initially.
So how does this play on?
And I'm asking this partially
because I'm personally
very interested
in B. R. Ambedkar
the Indian monetary thinker
and constitutionalist
whose two singular
obsessions early in his life
are Indian regional finances and
the problem of the rupee, which
for him are
intrinsically linked.
JAMES LIVESEY: And
I would extend that.
I'd say that if you
flip it forward again,
the problem of the euro is
this problem, where you have--
if you're investing in
the euro you're buying it
through Athens, you're paying
a completely different price
if you're buying
it through Berlin.
So we've recreated
in wonderful ways
this problem of a differentiated
but universal currency.
The problem of the
province is precisely--
the nation emerges as a
solution to the problem
of the province, where no
one can find a solution.
This is most obvious
in Irish history.
So after the Americans
declare independence,
the British state
clearly understands
that, if it continues
to act in the same way
toward its colonial
dependencies,
it will simply fracture.
So Ireland is given
free trade in 1779
and legislative
independence in 1782.
So thus, it is a province.
It's a part of the empire
with really established sort
of legal right to
act independently,
its right to free trade.
And then in 1785, they
tried to do a free trade
treaty between Britain and
Ireland as independent kingdoms
within an imperial structure.
And it can't be done, because
the problem of sovereignty
in an imperial structure
keeps reemerging,
that ultimately,
some entity is going
to have to be the final call.
And until you've done
something like the Holy Roman
Empire, where you have truly
distributed sovereignty,
that problem of the
sovereign ability to decide
keeps smashing up the
provincial structures.
STEFAN EICH: OK, I realize we've
actually wildly ran out of time
because I was so excited.
So I apologize for
holding you here.
And thank you to the four
fantastic panelists again.
[APPLAUSE]
