I’ve just put up an essay by Arjun and me — a sketch of the earlier history of the debates we discuss in Against Money.
We originally wrote this as a chapter for Against Money, but ended up not including it. I’ve lightly edited it to make it work better as a stand alone essay, but it is very much an integral part of the book. Anyone who found the book worth reading will, I think, find this essay interesting as well.
We wrote it in part to sketch out some main themes in the history of debates about money and credit, which is a subject that is weirdly neglected in most textbooks and readers on the history of economic thought. Personally, I think the economic theories of the much-maligned John Law, the debates between the Bullionists and anti-Bullionists, or the real bills doctrine are genuinely interesting in their own right and offer useful perspective on debates in our own time. One reasons I wanted to write this chapter is that, when I have taught the history of economic thought, I would have really liked something like this to assign.
That said, the essay is not an attempt at an anything like comprehensive overview of past debates about money and credit, which Arjun and I would not be qualified to write. Rather, it’s a selection of episodes from that history that connect with the questions we are asking in Against Money. It’s an attempt to provide a usable past specifically for the ideas in that book.
We didn’t include it in the published book, in part, because the publisher wanted the book to be shorter, and this was one chapter we could take out without ending to change very much elsewhere. But we also took it out at the suggestion of Perry Mehrling, who — as most readers will know — passed away, tragically and unexpectedly, a couple of weeks ago.
Perry was a very important teacher for both of us — though neither of us ever sat in a classroom with him — and an important influence on Against Money specifically. He read the whole draft at least twice and made a great many very helpful suggestions. The first read was one of our ‘anonymous’ reviewers. When he told us later, it was no surprise; as with the famous line about Newton, we had recognized the lion by his claw.
Perry didn’t dislike the chapter, or think it was wrong in any really major ways; but he did have some disagreements; and he thought, reasonably enough, that it wasn’t exactly in our professional wheelhouse (as it very much was in his), and most importantly, was a distraction from the book’s more important arguments. We accepted his point about focus, mulled over his other comments, and continued to discuss the substance of the chapter with him in the past few months.
The version posted here tries to address some of the concerns that Perry raised with the earlier version, though I am sure he would still have criticisms. We were hoping to revisit them more thoroughly in future conversations with him. But there will never be any more conversations with Perry — something that I find, even as I type it, almost impossible to believe. So we’ve decided to post the essay as it is.
We do think it does something useful in its current form. It’s also offered as a kind of memorial to Perry — as a tribute both to the specific economic vision he called the money view, and to his more fundamental idea that the logic of economic arguments is often best approached by understanding their historical development and originators, and the concrete historical contexts they were responding to. We couldn’t do it anything like as well as he did; that’s one reason we cut the chapter from the book. But making it necessary to try — that is a part of his legacy that we can testify to.
This essay would originally have gone after what is now chapter 1 of the book. To anyone reading this post who plans to read the book, I would suggest reading this essay between chapters 1 and 2, or else (as Perry might have preferred) between chapters 3 and 4.