Debating Sound Money in Early Modern Europe: From Dualist to Metallic Monetary Systems

In this paper, we present the monetary debates in Europe from the XVIth to the XVIIIth centuries from the viewpoint of the problem of good and sound money. The framework of the paper is built on a typology of monetary systems, by which a dualist system is distinguished from a metallic one. Under the dualist system, the value in units of account of the specie in circulation was defined by monetary proclamations (Einaudi locates this era from Charlemagne to the French Revolution). Metallist proponents aimed at preventing any kind of manipulations with a radical transformation of the system of payment, which gave birth to a metallic monetary system from the very end of the XVIIth century. The purpose here is not to propose an evolutionary view of monetary systems, which would reduce history to stages to be superseded by the advent of some higher stage; we wish to work on the difficulties of monetary systems and their interweaving, which partake of evolving forms of pluralistic money. Eventually, the advent of an era of monetary stability was a necessary precondition for an effective and sound credit system to develop, which in turn proved to be a pre-condition for the deployment of industrial capitalism—what has been called the ‘monetary revolution'.