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Response to Review of Making Money: Coin, Currency, and the Coming of Capitalism

The author would like to thank Katie Ball for her generous review of Making Money: Coin, Currency, and the Coming of Capitalism. This response aims only to clarify the contrast between the monetary worlds – medieval and modern – that the review correctly identifies.

Ms. Ball captures the book’s central theme in her first paragraph. Money is not a neutral medium that transparently expresses value. Rather, the way that communities create and conceptualize money determines what transactions occur. Money thus shapes the market itself. A particularly dramatic transformation in money’s design institutionalized the powerful markets of contemporary capitalism. That transformation, mapped in the book, explains both the great capacity of modern cash to lubricate exchange and the troubling constraints on managing money for public ends that accompanies the post-transformation emphasis on self-interest and profit-oriented incentives.

Medieval English authorities designed a money that moved by count but carried commodity content – its silver or gold base. As the review points out, that odd pairing of nominal and material value created long-running problems. The problems appear at first to be technical, but they shaped what exchanges could occur, how people used credit, how political alliances around money worked, and even how people conceived money and its relationship to sovereignty. We gain entry into the political economy of the times by engaging the weird shifts and instabilities caused by medieval money.

On that score, it may help to think of medieval money as a currency that moved at face value but carried its own collateral – the precious metal it contained. In fact, to obtain coin, people had to put up bullion at the mint; effectively, people had to pay with silver (or gold) for the money they bought from authorities. That requirement made money expensive and limited the number of coins in circulation, even as it gave them collateral value. Throughout the process, courts and kings emphatically enforced the count of the money. Great dramas resulted, including the wrenching effects of Gresham’s law as people calculated which coins to use at face value and which to hoard or export given their precious metal value.

The English radically redesigned money in the 17th and 18th centuries.  Their most striking innovation came when authorities borrowed in the form of paper notes from a group of investors, ordained the Bank of England. When they accepted those notes back as payment in lieu of coin, officials assimilated the bank notes to silver coin. The change was drastic: the government had shared its monopoly over money creation with bankers, began paying rather than charging for money’s creation, and put commercial actors in charge of modulating the money supply.  Those practices would reshape the flow of money, conceptions about the medium, and public policy on money.

At bottom, Making Money: Coin, Currency, and the Coming of Capitalism argues that money is a practice engineered by communities to mobilize resources and used by individuals for their own purposes along the way. Money is thus a mode of governance, one that connects authorities, groups, and individuals in essential and intimate ways. Studying how communities make and manage money illuminates their deepest debates over value, unsettles disciplinary boundaries, and opens up pressing issues of distributive justice.