The history of money – why do we need cryptocurrencies part XI

Today, we’re re-philosophising a little bit. Thinking about money again began to change in modern times.

Luther and Calvin

Perhaps everyone heard about Martin Luther. The fact that he did have his opinion about money, especially usury, knows fewer people.

In 1520, he published the so-called sermon about usury. Four years later, in an open letter to the German nobility, he wrote that usury was the greatest misfortune of his people. For the invention of borrowing money on interest, he accused Satan himself (maybe someone would use this argument today on some panel on loans?).

Filip melanchthon had a slightly different opinion, who, although generally shared Luther’s views, believed that money can be borrowed on interest, but only … rich. In short, a wealthy man can plunder as much as he can, poor – no!

A little less radical (and perhaps rational) was Jan Kalwin, who believed that interest-bearing loans are fine, so that only a percentage is not higher than the one determined by the authorities.

In general, Calvin did a lot of good for entrepreneurship. Although the thesis that religion has a decisive influence on the wealth of society has been overthrown a long time ago, one can agree that the thinking that the creator of Calvinism proposed certainly did not bother. Well, his theory of predestination subordinated everyday life to strict moral principles and emphasized the cult of work. The richness of a given person was a symptom of God’s grace for the Calvinists. You admit that it is a completely different approach from Polish thinking about a wealthy neighbor who probably “stole” when such a rich …

The value of money

Economists continued their economic studies. At the time of the Council of Trent, the Salamanca school came to the fore. Francisco Gracia advocated the dual nature of the value of money, ie natural and resulting from “respect.” He believed that a given coin can be worth differently in various places regardless of its consistent quality. Lighter? For a given number of denarii, you could buy in France at the time, for example, 10 pints of beer, while in Poland, the number of mugs filled with a golden beverage, for example, grew twice. Where do these differences come from? With 1) the rarity of coins in circulation, 2) demand for them and finally 3) the degree of security on the market. The application, however, was the rightness of collecting interest.

Domingo de Soto, Dominican, rejected the doctrine of a just price. He decided that the good is worth as much as others want to pay for it. He also noticed the power of supply and demand. The value of money was also to depend on how many coins are in circulation and how many buyers they have.

Martin de Azpilcueta can be regarded as a free-marketer. The various values ​​of the coins were also considered the effect of purchasing power. The exchange differences themselves should be smooth, due to changes in the markets. Attempts to centrally establish courses and maintain them at a constant value may, in his opinion, only bring damage.

Bernardo Davanzati puts it even more radically. He noticed that the central authority issuing the coin did not influence its purchasing power. He considered the currency for the general good, so he also forbade the rulers to spoil the coins (SPOILER ALERT! – they did not listen to him).

Where does inflation come from?

Jean Bodin tried to answer the above question. He noticed that inflation was not only subject to cursed currency, but also to good ones. Reason? In his opinion, the number of ore in circulation.

Nicholas Copernicus, known to every Polish child, contributed a lot to the topic. He participated in the preparation of the Prussian-Polish monetary union. In 1526 he published the treatise “The Way of minting”. He stated in it:

“The coin loses in respect especially due to its excessive amount, namely – if such a large amount of silver was punctured by coins, so that people would bid more for silver in gold than for a coin.”


Why, what about shouting for money? You can live without them! That’s what Thomas Morus, the author of “Utopia” or Tommaso Campanella (“The City of the Sun”) thought. Both of them in their utopias believed that perfect societies could function without money. Well, almost, because coins were only needed for international exchange.

The money, however, did not disappear, and even gained importance …

To be continued…


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