The Querist
In Berkeley's 1735 book, we find:
The quantity theory of money:
"22. Whether, therefore, less money swiftly circulating, be not, in effect, equivalent to more money slowly circulating? Or, whether, if the circulation be reciprocally as the quantity of coin, the
nation can be a loser?"
Price determination by supply and demand:
"24. Whether the value or price of things be not a compounded proportion, directly as the demand, and reciprocally as the plenty"
The importance of money for economic calculation:
"25. Whether the terms crown, livre, pound sterling, etc., are not to be considered as exponents or denominations of such proportion? And whether gold, silver, and paper are not tickets or counters for reckoning, recording, and transferring thereof?"
The falsity of mercantilism:
"108. Whether, although the prepossessions about gold and silver have taken deep root, yet the example of our Colonies in America doth not make it as plain as day-light that they are not so necessary to the wealth of a nation as the vulgar of all ranks imagine?
"109. Whether it be not evident that we may maintain a much greater inward and outward commerce, and be five times richer than we are, nay, and our bills abroad be of far greater credit, though we had not one ounce of gold or silver in the whole island."
The quantity theory of money:
"22. Whether, therefore, less money swiftly circulating, be not, in effect, equivalent to more money slowly circulating? Or, whether, if the circulation be reciprocally as the quantity of coin, the
nation can be a loser?"
Price determination by supply and demand:
"24. Whether the value or price of things be not a compounded proportion, directly as the demand, and reciprocally as the plenty"
The importance of money for economic calculation:
"25. Whether the terms crown, livre, pound sterling, etc., are not to be considered as exponents or denominations of such proportion? And whether gold, silver, and paper are not tickets or counters for reckoning, recording, and transferring thereof?"
The falsity of mercantilism:
"108. Whether, although the prepossessions about gold and silver have taken deep root, yet the example of our Colonies in America doth not make it as plain as day-light that they are not so necessary to the wealth of a nation as the vulgar of all ranks imagine?
"109. Whether it be not evident that we may maintain a much greater inward and outward commerce, and be five times richer than we are, nay, and our bills abroad be of far greater credit, though we had not one ounce of gold or silver in the whole island."
Nice quotes!
ReplyDeleteThe important thing to remember about the mercantilists - and this holds with Smith's critiques too - is that the money supply was much less elastic before 1694, when the Bank of England was established. There are some passages in Smith where he's critiquing Mun that are pretty funny to read - he says Mun is crazy to be so focused on the gold supply because we have navy bills and exchequer bills and all that stuff - no need for gold!
Smith forgets that while they had these things in the 1770s when Smith was writing, they did not have them in 150 years earlier when Mun was writing in the 1620s!!
The same goes here for Berkeley - everything he says there is exactly right, but you can't really hold it against the mercantilists writing in the early 17th century - they were stuck with an entirely different set of institutions.