domingo, 26 de outubro de 2008


"Professor Selgin's new book, Good Money, the true and remarkable story of private coinage and banking in Britain in the early years of the Industrial Revolution (1775–1850). Making money was a business in demand. The needs of business for small denominations were changing. Merchants needed small-denomination coins in copper and silver.

George Selgin, professor at West Virginia University, has discovered the monetary equivalent of the lost city of Atlantis. He has written a full-scale historical narrative — one that is deeply interesting and engaging — that has been largely unknown, even to scholars of the Industrial Revolution.(...) 

He tells the stories — of the merchants, the button makers who turned into coin makers, the way the system worked, its wonderful innovations, and its evolution — and reveals the cruelty and destructiveness behind the government's suppression of the industry.

The small-denomination-coin industry had developed to the point at which 20 independent mints were involved in making coins. These private coins served the merchants and the workers, while the government's currency served only the landed rich. The new industry was like capitalism itself: it was designed for everyone to the benefit of everyone.

The private coins tended to be better quality than the government's coins. Why? Because private merchants could refuse them — and consumers could too. There was competitive control over them and an inexorable tendency for currency to improve in every way. That's why the book is called Good Money.

And what of Gresham's Law, the tendency of "bad money" to drive out good money? Selgin's account demonstrates something striking: it only holds under government systems of money that overvalue bad money. In a private system, good money — like all good products and services in a free market — outcompetes the low-quality money. In a market-based money system, there is an inexorable tendency for good money to win out."

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