Friday, February 27, 2009

I think must be bugging my phone

Gresham's Law came up in a conversation with my brother the other day, so they post this article, Wage and Price Controls In The Ancient World, with this quote from Yuan Hsieh (AD 1223):
Now, the officials are anxious to increase wealth, and want to put both iron money and copper money in circulation. If money were suddenly made abundant during a period of scarcity, it should be very good. But the fact never can be so. Formerly, because the paper money was too much, the copper money became less. If we now add the iron money to it, should not the copper money but become still less? Formerly, because the paper money was too much, the price of commodities was dear. If we now add the iron money to the market, would the price not become still dearer? … When we look over the different provinces, the general facts are these. Where paper and money are both employed, paper is super-abundant, but money is always insufficient. Where the copper money is the only currency without any other money, money is usually abundant. Therefore, we know that the paper can only injure the copper money, but not help its insufficiency.[22]

The copper, in this case, goes to where it is most valued. Sometimes that's your mattress, but usually it goes to where "you get the most bang for your buck."

The footnote points to: Huan-ehang Chen, The Economic Principles of Confucius and His School (New York: Longmans, 1911) pp. 444–445.

I love the discussion of the Sumerian (Lagash) concept of Ama-gi, too. It means freedom, though, etymologically, it means, "return to the mother."

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