The Monetary Theory of the Lombard Enlightenment. The relationship. between economic arrangements and administrative decisions is at the core of the contributions of the Lombard economists of the eighteenth century, and it is also the main focus of this essay. Here, we wish to emphasize the importance of the history of ideas and of the history of facts in view of theory formulation and policy proposal within a framework of political economy. Theory must serve, together with history, to the governance of institutions aimed at the orderly working of economies and markets. The relationship. between economics and administration is at the root of the Milanese discussions on monetary policy that took place in the 1760s, and to which both Cesare Beccaria and Pietro Verri contributed. The interest of these discussions is twofold. On the one hand, as John Hicks pointed out, monetary disturbances throw light on the nature of money and on the problems monetary theory must address in moving from one context to another. On the other hand, monetary disturbances are important in highlighting the linkages between monetary theory and the governance of money in specific historical contexts. The writings of the Lombard Enlightenment economists are a case in point. For the Milanese monetary controversy highlights important theoretical issues concerning the governance of ‘imaginary money’, while also emphasizing the specific features of a context characterized by the integration between monetary and physical transfers on the international, and particularly European, scale. This controversy calls attention to monetary disturbances as triggers of change in monetary theory, but it also calls attention to the role of historical and institutional context in determining whether a given monetary policy may be effective or not. Monetary crises may trigger important developments in theory. At the same time, the crises highlight the objective character of structural conditions, which cannot be either unwillingly disregarded or deliberately violated. It is the task of the political economist to identify ‘a correct set of “economic laws” through the analysis of phenomena’, and outline on their basis ‘civil laws for the governance of the economy’(Quadrio Curzio). Section one of this essay (‘Monetary Disorders and Monetary Theory: A Premise’) outlines a conceptual framework for discussing the relationship. between theory, policy and historical context. Section Two (‘Economic Laws and Civil Laws’) discusses the monetary contributions of Cesare Beccaria and Pietro Verri and investigates the link between the structural properties of that ‘very delicate and complex device’ (Einaudi) that is the specific matter of monetary policy, and the civil or administrative laws and governmental decisions though which monetary policy comes into effect. Section Three (‘Monetary Theory and the Fundamental Ideas of Political Economy’) examines the links between the structure of economic systems as systems of interdependence among productive sectors and the structure of monetary systems as ‘systems of governance’ of that interdependence. Section Four (‘The Problem of “Debasement”; Monetary Disturbance and Real Standards’) focuses on the monetary controversy that triggered Beccaria’s and Verri’s contributions, and examines their attempt to identify a real standard for determining the relative value of the different currencies used for transactions on European markets. Section Five (‘Political Economy, Monetary Systems and the Practice of Monetary Policy’) considers possible developments of Beccaria’s and Verri’s contributions for what concerns the distinction between money as standard of measurement and money as means of payment. Section Six (‘Concluding Remarks’) draws the essay to close by discussing the integration between general principles of political economy and specific characteristics of ‘local’ context to be found in the monetary discussions of the Lombard Enlightenment.
Capital Par Excellence: On Money as an obscure thing
