Concept
Gresham's law
Overview
In economics, Gresham's law is a monetary principle stating that "bad money drives out good". For example, if there are two coins in circulation containing metal of different value, which are accepted by law as having similar face value, the more valuable coin based on the inherent value of its component metals will gradually disappear from circulation.
The law was named in 1857 by economist Henry Dunning Macleod after Sir Thomas Gresham, an English financier during the Tudor dynasty. Gresham had urged Queen Elizabeth to restore confidence in the debased English currency. The concept was thoroughly defined in Renaissance Europe by Nicolaus Copernicus and known centuries earlier in classical Antiquity, the Near East and China.
Overview adapted from Wikipedia (CC BY-SA 4.0; see the article history for authors).
Possible passages
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They appeared as immediate forerunners of the famous Report of the Bullion Committee of 1810, in which Ricardo’s views were adopted.[133] The singular circumstance, that Ricardo and his adherents, who held money to be merely a token of value, are called bullionists, is due not only to the name of that committee, but also to the nature of their theory. In his work on political economy, Ricardo repeated and developed…
Karl Marx, A Contribution to the Critique of Political Economy
States what Gresham's law is.
And so of nations: their trade is a mere exchange of exports for imports; and, whether money is employed or not, things are only in their permanent state when the exports and imports exactly pay for each other. When this is the case, equal sums of money are due from each country to the other, the debts are settled by bills, and there is no balance to be paid in the precious metals. The trade is in a state like that…
John Stuart Mill, Principles of Political Economy
States what Gresham's law is.
Of this nature is the fallacy in what is called, by Adam Smith and others, the Mercantile Theory in Political Economy. That theory sets out from the common maxim, that whatever brings in money enriches; or that every one is rich in proportion to the quantity of money he obtains. From this it is concluded that the value of any branch of trade, or of the trade of the country altogether, consists in the balance of…
John Stuart Mill, A System of Logic, Ratiocinative and Inductive
States what Gresham's law is.
Related ideas
- Simon & Schuster
- Aristophanes
- Treatise
- Isaac Newton
- Latin
- Yuan dynasty
- Hans-Hermann Hoppe
- Nicolaus Copernicus
- Venice
- The Story of Civilization
- Nicole Oresme
- Quantity theory of money
- Economics
- Israel
- Thomas Gresham
- Olsztyn
- Face value
Place in the tradition
Part of History of philosophy in Poland.