His­to­ri­cal rese­arch or ideology?

Money and the French Revo­lu­ti­on: His­to­ri­cal Rese­arch ver­sus Ideo­lo­gy and “Crea­ti­ve Writing»

Some ques­ti­on marks on his­to­ri­cal rese­arch, based on the rea­ding of a book by Rebec­ca Spang

By Paul Huber

The publi­ca­ti­on date of the book which moti­va­ted (or pro­vo­ked) me to wri­te this essay, is not up to date:

Rebec­ca Spang: Stuff and money in the French Revo­lu­ti­on, Har­vard Uni­ver­si­ty Press, 2015

I had read a review of the book in the Times Litera­ry Sup­ple­ment at the time[1], but I put it asi­de and for­got about it becau­se I was preoc­cu­p­ied with other topics at that time. It was only when I recent­ly del­ved deeper into the finan­cial histo­ry of the Anci­en Régime and the French Revo­lu­ti­on that the tit­le resur­fa­ced. I have now read the book, and I can’t help but give an in-depth account of my rea­ding impressions. 

I am some­ti­mes ama­zed by the poor books publis­hed in the disci­pli­ne of histo­ry today, by renow­ned publis­hers such as Har­vard Uni­ver­si­ty Press in the pre­sent case, and by the sci­en­ti­fi­cal­ly ques­tion­ab­le rese­arch con­tri­bu­ti­ons with which one can hold a pro­fes­sor­s­hip today (Rebec­ca Spang is a pro­fes­sor in the Histo­ry Depart­ment at India­na Uni­ver­si­ty in Bloo­m­ing­ton, India­na). This is one of many com­pa­ra­ble books that I would rather clas­si­fy under the hea­ding “crea­ti­ve wri­ting” than under the hea­ding “serious rese­arch”. The aut­hor lets her free asso­cia­ti­ons run loo­se, com­pa­res ever­ything with anything in order to gene­ra­te sen­se, makes many lear­ned refe­ren­ces, which most­ly remain arbi­tra­ry, but she shows a rather limi­ted under­stan­ding of the actu­al topic of her book. 

I noti­ce a simi­lar kind of wri­ting in other disci­pli­nes as well. Espe­cial­ly in the huma­nities I encoun­ter this kind of aca­de­mic “feuil­le­to­nism” again and again, for examp­le in phi­lo­so­phy or art histo­ry. But I am too litt­le ver­sed in the­se other disci­pli­nes to be able to wri­te a well-foun­ded cri­tique of it. Rebec­ca Spang, howe­ver, is wri­ting a book in the disci­pli­ne of histo­ry, which is fami­li­ar to me, and on a sub­ject in which I feel at home and whe­re I have a fair­ly good over­view of the lite­ra­tu­re and of the sta­te of rese­arch[2], which is why in this case I trust mys­elf to have a rea­son­ab­ly com­pe­tent judgment. It is the­re­fo­re pre­cise­ly her book that I want to have a clo­ser look at, as an exem­pla­ry case of a ques­tion­ab­le aca­de­mic style which appears to have beco­me a gene­ral trend. In doing so, it is indis­pensable to repro­du­ce some lon­ger quo­ta­ti­ons from the book, in order to make com­pre­hen­si­ble the fuz­zy and unclear, inde­ed often arbi­tra­ry way of argu­men­ta­ti­on and thin­king. In litera­ry terms, the fol­lowing could be descri­bed as a kind of “clo­se rea­ding”. In doing so, it is equal­ly indis­pensable to deal in depth with some of Spang’s state­ments on the histo­ry of money and cur­ren­cy, in order to exami­ne them for their truth­ful­ness and sci­en­ti­fic cha­rac­ter, becau­se Spang’s book shows con­si­derable defi­ci­ts in this respect. 

Eru­di­tion or «name dropping»?

The arbi­tra­ry refe­ren­ces and quo­ta­ti­ons alrea­dy turn up in the intro­duc­tion of Spang’s book, many of the names men­tio­ned being total­ly unre­la­ted to the sub­ject of the book. One rather gets the impres­si­on that it is a kind of “box ticking”, a che­cking of boxes to mark the cor­rect atti­tu­de by men­tio­ning the “cor­rect” names, and at the same time to give the impres­si­on of eru­di­tion by means of the mul­ti­tu­de of quo­ta­ti­ons and refe­ren­ces. The seri­es of names cited in the 18 pages of the intro­duc­tion alo­ne is long: Keynes, Marx, Thu­cy­d­i­des, the ency­clo­pe­dists Dide­rot and D’A­lem­bert, David Hume, Adam Smith, Cond­or­cet, Roland Bar­t­hes, Lou­is Althus­ser, John Locke, Judith But­ler, the aut­hor duo Michel Agli­et­ta and André Orlé­ans, the Baron d’Hol­bach, the Comte de Mira­beau, Max Weber, Andrew Dick­son White, Mar­cel Mari­on (aut­hor of a finan­cial histo­ry of Fran­ce), Edmund Bur­ke, Clai­re Crows­ton, Tom Kai­ser, Micha­el Kwass, Micha­el Sonen­scher, Fran­çois Furet, Tho­mas Pai­ne, the Comte d’An­trai­gues, Arthur Young, Charles Dickens, Ernest Lab­rous­se, Dani­el Mor­net, Alexis de Toque­vil­le, John Mar­koff — some others I may have over­loo­ked. The­se are only the names in the actu­al text of the intro­duc­tion, the asso­cia­ted foot­no­tes or comments pro­vi­de addi­tio­nal names, among many others that of Sla­voj Žižek, for examp­le – an oppor­tu­ni­ty to tick off ano­t­her box and to set ano­t­her mar­ker of atti­tu­de and eru­di­tion, devoid of any obvious con­nec­tion with the book’s topic. 

The tre­at­ment of others’ research

The “name drop­ping” and the arbi­tra­ry refe­ren­ces and quo­ta­ti­ons are one thing. But the way she tre­ats the rese­arch con­tri­bu­ti­ons of others is objec­tion­ab­le as well. Spang’s judgments about them are often ques­tion­ab­le or even sim­ply wrong, and in doing so she likes to make gene­ra­li­zing judgments in the style of actu­al sweeping blows. Regar­ding the rese­arch on the assi­gnats, for examp­le, Rebec­ca Spang says:

«Yet near­ly all exis­ting scho­l­ar­s­hip on the sub­ject igno­res ques­ti­ons of sov­er­eig­n­ty and gover­nan­ce and ins­tead tre­ats the assi­gnats as a test case for eco­no­mic poli­cy.» (p. 9). 

The state­ment is fal­se, the rese­arch lite­ra­tu­re is full of descrip­ti­ons of the poli­ti­cal con­di­ti­ons and moti­va­tions for the crea­ti­on of the assi­gnats. But the aut­hor cle­ver­ly pro­tects herself by inser­ting the word “near­ly”. Such sleight of hand can be found again and again, to rela­ti­vi­ze her own state­ments as well as the state­ments of others.

Simi­lar gene­ra­li­zing, inac­cu­ra­te, and in many cases fal­se “assess­ments” of others’ rese­arch work can be found in gre­at num­bers in Spang’s book. Ano­t­her example:

«In the gre­at bulk of work on the ‘ori­gins of the French Revo­lu­ti­on’, revo­lu­tio­na­ry events them­sel­ves seem never actual­ly to hap­pen. Focu­sed as they are on eigh­te­enth cen­tu­ry inno­va­tions, the­se stu­dies tre­at revo­lu­ti­on more or less as an afterthought.» (p. 53). 

One won­ders which books on the cau­ses and back­ground of the French Revo­lu­ti­on Rebec­ca Spang is refer­ring to here. If one takes Wil­liam Doyle’s book “Ori­gins of the French Revo­lu­ti­on”[3], for examp­le, one can not only read about the deve­lo­p­ments that pre­ce­ded and influ­en­ced the Revo­lu­ti­on, but also how the events of 1789 actual­ly unfold­ed. If indi­vi­du­al rese­arch con­tri­bu­ti­ons have exami­ned cer­tain fea­tures of the Anci­en Régime in depth, without always focu­sing direct­ly on the Revo­lu­ti­on, it is none­theless pre­cise­ly the­se in-depth inves­ti­ga­ti­ons that made it easier to under­stand what was new about the Revo­lu­ti­on and why, or out of what pre­con­di­ti­ons, the explo­si­ve dischar­ge of the Revo­lu­ti­on came about in the first place, but also what the con­ti­nui­ties were. (By the way, also in the pas­sa­ge quo­ted abo­ve, Spang app­lies her usu­al trick by inser­ting the fuz­zy term “the gre­at bulk” in order not to make her own attack its­elf vulnerable). 

Ano­t­her examp­le of the super­fi­cial cri­ti­cism of the rese­arch of others:

«His­to­ri­ans have heretofo­re rare­ly noted the role play­ed by the free-mar­ket illu­si­on in radi­ca­li­zing the Revo­lu­ti­on.» (p. 205). 

This state­ment, again, is incor­rect. The role that ide­as of the free mar­ket and pro­per­ty rights play­ed in the Revo­lu­ti­on is well descri­bed by many aut­hors. But here again the aut­hor pro­tects herself cle­ver­ly by inser­ting the word “rare­ly”. Bes­i­des the unfoun­ded asser­ti­on, the aut­hor also app­lies the pejo­ra­ti­ve term of “illu­si­on” here. Cal­ling the ide­as of the free mar­ket a “free-mar­ket illu­si­on” is an ideo­lo­gi­cal a prio­ri posi­ti­on that she does not sub­stan­tia­te any fur­ther, ano­t­her one of her atti­tu­de markers.

One won­ders whe­ther the con­de­scen­ding assess­ment of the rese­arch con­tri­bu­ti­ons of others is due to today’s man­ner of “over-sel­ling” or self-mar­ke­ting, whe­re one always has to loud­ly announ­ce every litt­le idea of one’s own as a gre­at new fin­ding — a “dis­rup­ti­on” — in order to set oneself apart from others at all cos­ts and to stand out as excep­tio­nal and uni­que. It is an atti­tu­de that gets tire­so­me after a while and does not real­ly cover up the poor­ness of Spang’s own “new” insights.


Equal­ly dis­tur­bing are the many pre­ten­tious, but tex­tual­ly hol­low and often inac­cu­ra­te sen­ten­ces, of which the­re are count­less num­bers in this book. A typi­cal example:

«Though both are cen­tral to any histo­ry of the Revo­lu­ti­on, indeb­ted­ness and tem­po­ra­li­ty have rare­ly been brought into the same nar­ra­ti­ve frame­work.» (p. 17)

Has anyo­ne ever read any essay or book on the sub­ject of debt that did not simul­ta­ne­ous­ly talk about the matu­ri­ty date (or dates) of the debt (i.e., a form of “tem­po­ra­li­ty”)? Or does the aut­hor mean some­thing else ent­i­re­ly? But what else does she mean? She does not cla­ri­fy this any­whe­re. Simi­lar state­ments occur again and again. It is as if she were under a com­pul­si­on to always come up with new, well-sound­ing, but essen­ti­al­ly empty for­mu­la­ti­ons — in other words, feuil­le­to­nism. It is part of the pic­tu­re that the abo­ve quo­ta­ti­on again con­tains an impli­cit reproach against the rese­arch of others that is said to have only rare­ly addres­sed what Spang wanted.

Ano­t­her typi­cal examp­le of Spang’s free asso­cia­ti­on, which sear­ches for the see­min­gly pro­found wor­d­ing but lacks a clear thought or state­ment, is the fol­lowing sentence:

«Much as the Mor­te d’Arthur is a romance about the death of Arthur, a ‘mort-gage’ was a gage (that is, a pled­ged item) that was mort (or dead).» (p. 35). 

What is the bene­fit of this jux­ta­po­si­ti­on? What is the point of rela­ting the tit­le of the Eng­lish-lan­guage late medi­eval com­pi­la­ti­on of Old French and Midd­le Eng­lish tales of the Arthu­ri­an legend, drawn up by Tho­mas Malo­ry and first publis­hed in 1485, and a finan­cial instru­ment of the Anci­en Régime? The bene­fit is zero, but the com­pa­ri­son is evi­dent­ly meant to place ano­t­her eru­di­tion mar­ker. It is one examp­le (among many) of the author’s pen­chant for arbi­tra­ry asso­cia­ti­on and for com­pa­ring ever­ything with anything in order to simu­la­te mea­ning and depth. Spang con­fu­ses wor­d­play with insight. 

Right in the lines befo­re the abo­ve quo­ta­ti­on, Spang also reproa­ches the his­to­ri­ans for having “often” (note again the rela­ti­viz­a­ti­on to make one’s own attack unassailab­le) mis­trans­la­ted the term “hypo­thè­que” as Eng­lish “mor­tga­ge”, which accord­ing to her opi­ni­on were dia­metri­cal oppo­si­tes accord­ing to the French legal cul­tu­re of that time (p. 35). An asser­ti­on that I can­not com­pre­hend with the best will in the world, and for which she herself gives no fur­ther explana­ti­on or evidence. 

Unfa­mi­lia­ri­ty with the topic of research

What is real­ly sho­cking, howe­ver, is that a lot of fac­tu­al infor­ma­ti­on on the sub­ject of money and cur­ren­cy — the actu­al topic of Spang’s book — is sim­ply wrong. I am ama­zed at how one can wri­te a book about “money” without actual­ly having in-depth know­ledge of eco­no­mics, money or currency. 

A first examp­le: Rebec­ca Spang says that the life annui­ties of the Anci­en Régime were “short-term debt” (!) (pp. 19–20). A debt who­se dura­ti­on lasts over the ent­i­re life­time of the pen­si­on reci­pi­ents (“ren­tiers”) who sub­scri­bed to the pen­si­on should be a short-term debt? Has Rebec­ca Spang even read the books she cites? Becau­se uni­form­ly, and con­sis­tent with the facts, they tre­at life annui­ties as a “long-term debt”[4]. I am ama­zed that not even the edi­tor of an aca­de­mic publi­shing house (the book is publis­hed by Har­vard Uni­ver­si­ty Press!) cor­rects this, but sim­ply waves it through. Even more dis­tur­bing are the unre­sol­ved con­tra­dic­tions in Spang’s own argu­men­ta­ti­on, when else­whe­re (p. 16) she herself men­ti­ons that, accord­ing to a cal­cu­la­ti­on of 1790, the pay­ment obli­ga­ti­ons of the French sta­te for its public debt, con­sis­ting main­ly of per­pe­tu­al annui­ties and life annui­ties, would remain a fixed part of the sta­te bud­get until at least the year 1822. Is this a dura­ti­on for “short-term debt”?[5]

With regard to life annui­ties (French: “ren­tes via­gè­res”), Spang fur­ther­mo­re adds a rea­so­ning that bor­ders on the absurd: 

«It was also wide­ly asser­ted that ren­tes via­gè­res by their very natu­re were con­tracts that could not be reim­bur­sed; they were, after all, life-time invest­ments. Retur­ning the amount ori­gi­nal­ly given would mean pre­ma­tu­re­ly ending the life of the ren­teand, by impli­ca­ti­on, that of the inves­tor (or whoever had been named as the ‘head’ in the con­tract).» (p. 72)

Unli­ke per­pe­tu­al annui­ties (French: “ren­tes per­pé­tu­el­les”), life annui­ties could inde­ed not be redeemed, but this has not­hing to do with the fact that the life of the annui­tant (i.e. the pen­si­on reci­pi­ent) would also have ended if they were ter­mi­na­ted pre­ma­tu­re­ly. How does Spang come up with such an absurd idea? Such sen­ten­ces defi­ni­te­ly belong in the cate­go­ry «crea­ti­ve wri­ting cour­se»! The con­trac­tu­al bene­fit sim­ply ran until the annuitant’s death, as is the case with today’s pensions.

Spang about the money of the com­mon people

Ano­t­her examp­le of a lack of tech­ni­cal fami­lia­ri­ty with the sub­ject is Spang’s asser­ti­on about the pro­duc­tion cos­ts of coins of low nomi­nal value. Such coins would have been vanis­hin­gly small and thus unus­able or almost impos­si­ble to pro­du­ce if they had only been made of pre­cious metal. Spang writes:

«[….] Made from various alloys, the lowest deno­mi­na­ti­on coins rou­ti­nely had face values that excee­ded the mar­ket worth of the metals com­po­sing them. [….] Mixing the sil­ver with ano­t­her metal, such as cop­per, made it pos­si­ble to gene­ra­te lar­ger coins with the same sil­ver con­tent, but it also requi­red a far more ela­bo­ra­te and expen­si­ve pro­duc­tion pro­cess. So whe­re­as mint mas­ters and the sta­te made money on the min­ting of gold and sil­ver coins, they lost it on small chan­ge, which was the­re­fo­re only pro­du­ced under pres­su­re and as a sort of ‘public ser­vice’ or wel­fa­re mea­su­re.» (p. 145f.)

It is true that at all times coins of low deno­mi­na­ti­ons have not been made of pure sil­ver, sin­ce such a coin would have been much too small. They were made in an alloy of pre­do­mi­nant­ly non-pre­cious metal (esp. cop­per) with the addi­ti­on of only a small amount of sil­ver (so-cal­led “bil­lon” coins), some­ti­mes even in pure cop­per or bron­ze. This had alrea­dy been the case at the time of the Romans as well as in the Midd­le Ages, and equal­ly in the 18th cen­tu­ry, which is the sub­ject here. Low deno­mi­na­ti­on coins have always been token coins (Ger­man: “Schei­de­mün­zen”), i.e. coins who­se metal value is far lower than their nomi­nal value.

What is incor­rect, though, is Spang’s asser­ti­on that the pro­cess of pro­du­cing low deno­mi­na­ti­on coins from non-pre­cious metal was much more com­plex and more expen­si­ve than the pro­cess of pro­du­cing coins from pre­cious metal. The — lar­ge­ly manu­al — pro­duc­tion pro­cess was in lar­ge part iden­ti­cal for all coins, except that the pro­duc­tion cos­ts per coin for a low deno­mi­na­ti­on coin logi­cal­ly accoun­ted for a much lar­ger pro­por­ti­on of its nomi­nal value than for a high-value coin made from pre­cious metal. It is pre­cise­ly becau­se the aut­ho­ri­ties did not want to bear the pro­duc­tion cos­ts of the coins that the intrinsic value (the pro­por­ti­on of the metal value) of low deno­mi­na­ti­on coins has always been far below their nomi­nal value, unli­ke that of pre­cious metal coins. 

Equal­ly incor­rect is Spang’s rela­ted claim, deri­ved from her assump­ti­on about the pro­duc­tion cos­ts, that “the mint mas­ters and the sta­te” (Spang equa­tes their inte­rests, but this was not the case) pro­du­ced small chan­ge coins only under pres­su­re and as a kind of public ser­vice — wher­eby Spang insi­nua­tes that the sta­te avoided the­se cos­ts at the expen­se of the com­mon peop­le and insuf­fi­ci­ent­ly sup­plied the popu­la­ti­on with small change.

The rese­arch lite­ra­tu­re knows of only a few instan­ces in the histo­ry of money whe­re the aut­ho­ri­ties sub­si­di­zed the issu­an­ce of coins. On the con­tra­ry, from the right of coi­na­ge that the lords clai­med for them­sel­ves as a sov­er­eign pre­ro­ga­ti­ve, they infer­red to be enti­t­led to a min­ting pro­fit, inclu­ding when min­ting low deno­mi­na­ti­on coins made from non-pre­cious metals. The min­ting pro­fit (the so-cal­led seig­ni­o­ra­ge, French “sei­gneu­ria­ge”, from “sei­gneur” = lord) is the value of the finis­hed coin minus the cost of metal and pro­duc­tion. The seig­ni­o­ra­ge is basi­cal­ly a hid­den tax. 

From the book by Tho­mas Sar­gent and Fran­çois Vel­de, “The Big Pro­blem of Small Chan­ge”[6], in which the aut­hors cover the peri­od from the Midd­le Ages to the 19th cen­tu­ry, it beco­mes evi­dent that the­re can be no ques­ti­on of a sub­si­di­z­a­ti­on of the pro­duc­tion of small deno­mi­na­ti­on coins. Spang refers to the book (p. 146), but one has to assu­me that she did not real­ly under­stand its con­tents or that she was not actual­ly inte­res­ted in the tech­ni­cal aspects of the topic “money”. For examp­le, the aut­hors wri­te in refe­rence to an event in Fran­ce in 1461: «This was a rare instance of a medi­eval government sub­si­di­zing the pro­duc­tion of small coins, but only out of the pro­fits made on other coins.[7]. The ruler gave the mint mas­ters spe­ci­fi­ca­ti­ons regar­ding the expec­ted volu­me of seig­ni­o­ra­ge. As this could be achie­ved more quick­ly by pro­du­cing coins of high value, the mint mas­ters pre­fer­red to pro­du­ce the­se. For this rea­son, the ruler often gave the mint mas­ters spe­ci­fi­ca­ti­ons regar­ding the volu­me of dif­fe­rent deno­mi­na­ti­ons they had to mint. In excep­tio­nal cases it was the­re­fo­re pos­si­ble that the mint mas­ters sub­si­di­zed the min­ting of low deno­mi­na­ti­on coins with the seig­ni­o­ra­ge from high-value coins. Over­all, howe­ver, the sov­er­eign hims­elf hard­ly ever sub­si­di­zed the min­ting of coins, neit­her in the Midd­le Ages nor in the fol­lowing centuries.

In the Midd­le Ages and the ear­ly modern peri­od, min­ting pro­fits had pro­vi­ded a signi­fi­cant pro­por­ti­on of the means for sta­te expen­dit­u­re in many coun­tries, inclu­ding Fran­ce. Par­ti­cu­lar­ly in times of war, in order to finan­ce the war effort, the min­ting pro­fit was incre­a­sed by redu­cing the weight and/or the pre­cious metal con­tent of the coins (alt­hough the coins retai­ned the same nomi­nal value), while at the same time the num­ber of coins issued was incre­a­sed. Both — the lower intrinsic value of the coins and their ove­ris­su­an­ce — led to an adjus­t­ment in pri­ces, in short: to inflation. 

Such coin deba­se­ment, dri­ven by fis­cal inte­rests, par­ti­cu­lar­ly affec­ted small chan­ge coins as well, i.e. bil­lon coins and cop­per coins. In her book “Bime­tal­lism”, the mone­ta­ry his­to­ri­an Ange­la Redish gives two tel­ling examp­les from 17th cen­tu­ry Fran­ce, the first the examp­le of a recoinage:

«[…] in 1654–56, in the after­math of the civil war known as the Fron­de, the­re was a mas­si­ve cop­per reco­i­na­ge. The sta­ted ratio­na­le was to pro­vi­de low-deno­mi­na­ti­on coins and to dri­ve out for­eign cop­per coins; howe­ver, the fis­cal advan­ta­ges were doubt­less also signi­fi­cant.»[8]

Min­ting pro­fit, not sub­si­di­z­a­ti­on, was the objec­ti­ve here. The same objec­ti­ve also app­lied to the pro­duc­tion of small deno­mi­na­ti­on coins made from “bil­lon”, who­se pro­duc­tion had been inter­rup­ted sin­ce 1603 and was resu­med in 1674 to finan­ce the wars of Lou­is XIV:

«No bil­lon coins were min­ted bet­ween 1603 and 1674, when the need to ”find a healt­hy aid to the affairs of the Sta­te, and to con­tri­bu­te to the pres­sing expen­ses of the war” (ordi­nan­ce cited in May­hew […]) led to the issue of 2 and 4 sols pie­ces 10 deni­er fine in Paris and Lyon. The coins were not only low in fineness but also overva­lued by 33% (a mint equi­va­lent of 36lt, com­pa­red to 27lt for the sil­ver lou­is). Over-valua­ti­on meant pro­fits for the king but equal­ly made coun­ter­fei­t­ing pro­fi­ta­ble, and the coins were immedia­te­ly coun­ter­fei­ted.»[9]

Here too, min­ting pro­fit, not sub­si­di­z­a­ti­on, was the objec­ti­ve. Bes­i­des, ano­t­her pro­blem that con­stant­ly aro­se in rela­ti­on to coins of low intrinsic value is showing up here, name­ly the pro­blem of coun­ter­fei­t­ing. If min­ting had only been pos­si­ble at a loss, it would not be pos­si­ble to exp­lain why the per­ma­nent pro­blem of coun­ter­fei­t­ing exis­ted at all. Who would coun­ter­feit a coin that cos­ts more to pro­du­ce than the coin can buy?

In their book, Sar­gent and Vel­de equal­ly descri­be various peri­ods of infla­tio­na­ry cur­ren­cy deba­se­ment, which were always dri­ven by the need to use the pro­duc­tion of small deno­mi­na­ti­on coins for fis­cal pur­po­ses. In 1596, for examp­le, King Phil­ip II of Spain deci­ded that hence­forth, ins­tead of the pre­vious bil­lon coins, pure cop­per coins (with the same nomi­nal value) should be min­ted, thus saving, i.e. retai­ning as min­ting pro­fit, the cost share of sil­ver which had pre­vious­ly accoun­ted for one-third of the pro­duc­tion costs: 

«Until then, cop­per, sil­ver, and min­ting cos­ts each for­med a third of the face value of bil­lon coi­na­ge. With Phil­ip II’s decree, the sil­ver was with­held and the cop­per con­tent redu­ced.» [10]

Phil­ip II and his advi­sors were awa­re that this posed a risk of infla­ti­on, and they wan­ted to pre­vent this by limi­t­ing the num­ber of new coins issued and reti­ring the ear­lier bil­lon coins[11]. Howe­ver, his suc­ces­sors Phil­ip III (1598–1621) and Phil­ip IV (1621–65) drop­ped this restric­tion, and for fis­cal rea­sons (i.e., to incre­a­se the funds avail­ab­le for government expen­dit­ures) an over­pro­duc­tion of cop­per coins began, lea­ding to seve­re infla­ti­on[12].

The risk of infla­ti­on and the ade­qua­te sup­ply of small chan­ge to the popu­la­ti­on were part of what Sargent/Velde in their book descri­be as “the big pro­blem of small chan­ge”[13]. The fact that the intrinsic value of low deno­mi­na­ti­on coins was below their nomi­nal value, plus the trend to the ove­ris­su­an­ce of such coins, repeated­ly led to a cree­ping infla­tio­na­ry adjus­t­ment of pri­ces, expres­sed in low deno­mi­na­ti­on coins, while pri­ces in gold or sil­ver coins with high intrinsic value (“full-bodi­ed coins”) remai­ned more sta­ble. Low deno­mi­na­ti­on coins thus gra­du­al­ly lost value with respect to pre­cious metal coins, and accord­in­gly more and more low deno­mi­na­ti­on coins were nee­ded to buy a pre­cious-metal coin. The deba­se­ment main­ly affec­ted coins of low value, while the pre­cious metal con­tent of sil­ver and abo­ve all gold coins was more likely kept sta­ble, pro­bab­ly not least becau­se such “hard cur­ren­cy” was indis­pensable in inter­na­tio­nal tra­de, and pres­um­a­b­ly becau­se the rulers, too, valued a means of secu­re­ly safe­kee­ping — and pre­ser­ving the value of — their own fortune. 

Due to the down­ward sli­de in the value of low deno­mi­na­ti­on coins, their value came clo­ser and clo­ser to their intrinsic metal value, and the­re comes a point in time when the metal value of low deno­mi­na­ti­on coins exceeds their nomi­nal value, so that it beco­mes pro­fi­ta­ble to melt down the coins and sell the metal. Thus aro­se the para­do­xi­cal situa­ti­on that as the demand for low deno­mi­na­ti­on coins incre­a­ses due to the pri­ce infla­ti­on, they beco­me incre­a­singly scar­ce. Over the cen­tu­ries, the aut­ho­ri­ties have repeated­ly respon­ded to this situa­ti­on by fur­ther lowe­ring the metal con­tent of the coins to make it inte­res­ting again for peop­le to bring metal to the mint to have coins made from it, rather than con­ver­se­ly mel­ting coins down to extract the metal. Howe­ver, each reduc­tion in the intrinsic value (metal value) of the coins ten­ded to lead to a new cycle of decli­ne in the value of the coins.

Until the 18th cen­tu­ry, the sta­te had deve­lo­ped other methods of taxa­ti­on, the seig­ni­o­ra­ge had beco­me less important (its share of the nomi­nal value of coins was now often very small), and one had come to rea­li­se that the deba­se­ment of coins was detri­men­tal to the eco­no­my and thus also to the sta­te. As in other coun­tries, the aim in Fran­ce was the­re­fo­re to keep the pre­cious metal con­tent of sil­ver and gold coins sta­ble, and in the case of small deno­mi­na­ti­on coins, the aim was both to main­tain their intrinsic value and to con­trol the num­ber of coins in cir­cu­la­ti­on due to the risk of inflation.

As Sar­gent and Vel­de point out in their work (and as Cipol­la had alrea­dy noted[14]), it was only in the 19th cen­tu­ry that the “stan­dard for­mu­la” was found for pro­vi­ding small chan­ge with litt­le intrinsic value without the ear­lier pro­blems of the shor­ta­ge of low deno­mi­na­ti­on coins: (a) the sta­te its­elf issu­es low deno­mi­na­ti­on coins, who­se intrinsic value is lower than their nomi­nal value; (b) the quan­ti­ty of cir­cu­la­ting coins must be limi­ted (becau­se of the risk of infla­ti­on); © the con­ver­ti­bi­li­ty of the­se low deno­mi­na­ti­on coins into a sta­ble anchor cur­ren­cy of pre­cious metal is gua­ran­te­ed (thus making con­fi­dence in the low deno­mi­na­ti­on coin inde­pen­dent of its low intrinsic value). It was pre­cise­ly the last point of the stan­dard for­mu­la that was reco­gni­zed as important and imple­men­ted only in the 19th century.

Howe­ver, alrea­dy in the 18th cen­tu­ry the shor­ta­ge of low deno­mi­na­ti­on coins did not reach the same pro­por­ti­ons as in ear­lier cen­tu­ries. It is true that, in the 18th cen­tu­ry, pro­por­tio­nal­ly fewer pure cop­per coins were min­ted in Fran­ce than in coun­tries such as, e.g., Gre­at Bri­tain, and low deno­mi­na­ti­on coins in Fran­ce con­ti­nued to be rather bil­lon coins (cop­per coins with a small addi­ti­on of sil­ver). Howe­ver, one does not necessa­ri­ly need to see this as a dis­re­gard for the mone­ta­ry needs of the com­mon peop­le. Rather, this could also be inter­pre­ted as restraint or cau­ti­on, sin­ce one did not want to issue small chan­ge coins who­se intrinsic value was far below their nomi­nal value, and which might the­re­fo­re have been at risk of loss of con­fi­dence and thus loss of value. Fran­ce had made bad expe­ri­en­ces in the past with expe­ri­ments in “fiat money” (i.e., money that had no intrinsic value but was backed only by the credit­wort­hi­ness of the sta­te – we will come back later to the paper money of John Law), and the­re was a deep mistrust among the popu­la­ti­on of any form of “worth­less” money. Unli­ke in Gre­at Bri­tain, the state’s credit­wort­hi­ness was in a deplor­able con­di­ti­on, and France’s finan­cial and mone­ta­ry sys­tem was not near­ly as deve­lo­ped as that of its rival across the Chan­nel, as beca­me equal­ly evi­dent in the sta­te bankrupt­cy of 1788 (more of which later)[15]

Still, the­re was inde­ed a shor­ta­ge of small deno­mi­na­ti­on coins during the Revo­lu­ti­on. But con­tra­ry to Spang’s insi­nua­ti­on that the eli­tes neglec­ted the people’s con­cerns about the shor­ta­ge of small deno­mi­na­ti­on coins, the par­lia­men­ta­ri­ans took the­se con­cerns very serious­ly. Among other things, it was deci­ded to melt down church bells in order to obtain metal for min­ting coins. After all, whe­re should the requi­red cop­per have come from? Yet, the shor­ta­ge of small chan­ge coins per­sis­ted, and to reme­dy this, assi­gnats of ever smal­ler deno­mi­na­ti­ons were prin­ted from Janu­a­ry 1792 onwards. The­se, howe­ver, suf­fe­red from the same value decli­ne as all assi­gnats — a value decli­ne to which we will come back later and which goes far bey­ond the pro­blem of small change. 

By the way, when the­re was a shor­ta­ge of small chan­ge, the popu­la­ti­on often made do with sub­sti­tu­te coins or with other means (local wri­te-up or credit money sys­tems, whe­re debts and lia­bi­li­ties were writ­ten down and off­set against each other without exch­an­ging cash, etc.). Spang cites such examp­les, but always with the impli­cit cri­ti­cism of the fail­u­re of the aut­ho­ri­ties who, in her view, were unwil­ling to grant the peop­le a good cur­ren­cy, and not with admi­ra­ti­on for the resource­ful­ness of the com­mon peop­le, who­se advo­ca­te Spang other­wi­se pre­ten­ds to be. One could also argue against Spang that the eli­tes had no inte­rest whatsoever in exclu­ding the com­mon peop­le from the money eco­no­my; on the con­tra­ry, the exten­si­on of the money eco­no­my to the­se stra­ta would pro­bab­ly have been more to the liking of the eli­tes, sin­ce this would have invol­ved the inclu­si­on of the com­mon peop­le in the exchan­ge via anony­mous mar­kets ins­tead of via neigh­bor­hood networks. 

Spang’s cri­tique of the idea of “com­mo­di­ty money”

A con­sis­tent fea­ture of Rebec­ca Spang’s state­ments is her cri­ti­cism of the idea of the intrinsic value embo­di­ed in the coins made of sil­ver and gold — a cri­ti­cism of the idea of “com­mo­di­ty money”. This is the term used to descri­be money that is made of a mate­ri­al that its­elf has value (use value or sym­bo­lic value — intrinsic value, that is)[16]

Spang would have done bet­ter to read the remarks of Marc Bloch, one of the foun­ders of the “Anna­les” school of his­to­rio­gra­phy, in his “Esquis­se d’u­ne his­toire moné­taire de l’Eur­o­pe”. His excel­lent account of the mone­ta­ry histo­ry of Euro­pe sin­ce Char­le­ma­gne was publis­hed post­hu­mous­ly by his friends in 1954 from his lec­tu­re notes (Bloch was dis­mis­sed as a pro­fes­sor by the Vichy government in 1942 becau­se he was Jewish, went into the Résis­tance, and was mur­de­red by the Nazis in 1944, as a Résis­tance figh­ter and as a Jew). 

At the end of the intro­duc­tion to his sketch of a Euro­pean mone­ta­ry histo­ry, Bloch writes:

«Der­nier rap­pel: la val­eur intrin­sè­que d’une mon­naie est la teneur de cet­te mon­naie en métal pré­cieux. Par cont­re, la val­eur d’échange ou pou­voir d’achat de cet­te mon­naie est une noti­on d’ordre uni­que­ment social et éco­no­mi­que. Elle aug­men­te quand on peut ache­ter plus de mar­chan­di­ses pour une même val­eur intrin­sè­que; elle dimi­nue dans le cas inver­se; autre­ment dit, elle aug­men­te quand les prix bais­sent et dimi­nue quand ceux-ci s’é­lè­vent. Son étu­de appar­tient à cel­le des prix.”[17]

«A final recap: The intrinsic value of a coin is its pre­cious metal con­tent. By con­trast, the exchan­ge value or purcha­sing power of a coin is a pure­ly social and eco­no­mic con­cept. It incre­a­ses when more goods can be bought for the same intrinsic value; it decre­a­ses in the oppo­si­te case; in other words, it incre­a­ses when pri­ces fall and decre­a­ses when pri­ces rise. Its stu­dy belongs to the stu­dy of prices.»

It could hard­ly be said more clear­ly and more simply.

Spang would equal­ly have done well to read the con­cise descrip­ti­on of the com­plex pro­blems of “com­mo­di­ty money” and of the sup­ply of money in a cur­ren­cy sys­tem based on several metals, given by Ange­la Redish in the chap­ter “The mecha­nics of com­mo­di­ty money” of her afo­re­men­tio­ned book “Bime­tal­lism”[18].

The value of money in the Anci­en Régime was deter­mi­ned by a mul­ti­tu­de of dyna­mic and inter­de­pen­dent para­me­ters: by the respec­ti­ve over­sup­ply or under­sup­ply of goods (depen­ding, for examp­le, on the size of a year’s har­vest, on import and export flows, etc.), by the legal­ly fixed values of the coins or metals among them­sel­ves, as well as by the deve­lo­p­ment of the rela­ti­ve pri­ces of gold, sil­ver and cop­per among them­sel­ves, which often clas­hed with the legal­ly fixed values. The for­mer were pri­ma­ri­ly depen­dent on the sup­ply and demand of each of the­se metals, inclu­ding sup­ply and demand from abroad, whe­ther in intra-Euro­pean tra­de or in tra­de with the Levant and the Ori­ent. Espe­cial­ly in the lat­ter tra­de, pre­cious metals were still the only means of pay­ment in the 18th century.

Pre­cious metals are a com­mo­di­ty that has a value in its­elf, and they were used as a uni­form medi­um of exchan­ge espe­cial­ly in inter­na­tio­nal tra­de — also in intra-Euro­pean tra­de – in the form of coins, or non-min­ted as ingots or in other raw form, mea­su­red by weight and puri­ty. Gold and sil­ver are homo­ge­ne­ous as a mate­ri­al, as ele­ments (lis­ted in the perio­dic table) they can­not be pro­du­ced at dis­cre­ti­on (des­pi­te all the attempts of the alche­mists!), and their rela­ti­ve scar­ci­ty makes them valu­able (they have a high value with a low volu­me). And thanks to their homo­gen­ei­ty, they are sui­ta­ble as a uni­ver­sal­ly valid uni­form medi­um of exchan­ge even when not min­ted. The fact that pre­cious metals were also tra­ded as com­mo­di­ties does not con­tra­dict their role as car­ri­ers of the intrinsic value of pre­cious metal coins, but on the con­tra­ry is pre­cise­ly the basis of that role.

Spang, howe­ver, insists on cri­ti­cis­ing the idea of the intrinsic value of pre­cious metal coins as a “cul­tu­ral fan­ta­sy” (p. 238) – an opi­ni­on that is incom­pre­hen­si­ble. For thousands of years, gold was con­si­de­red to have intrinsic value. Does Spang want to tell us that for thousands of years man­kind has been taken in by a “cul­tu­ral fan­ta­sy” and has erred in assigning a value of its own to gold? Do we need to rewri­te histo­ry? Were the Aztecs sim­ply unlu­cky not to have read Spang yet? One might ask whe­ther Spang lives in a dif­fe­rent uni­ver­se. We will come back to her “cul­tu­ral fan­ta­sy” later.

Throughout the cen­tu­ries, the tra­ding of pre­cious metals in the mar­kets basi­cal­ly set limits to the aut­ho­ri­ties in mani­pu­la­ting the cur­ren­ci­es they min­ted. In for­eign tra­de, but also in domestic tra­de, the refe­rence to the value of pre­cious metals always remai­ned a means for mar­ket actors to cal­cu­la­te the pri­ces of their goods and the value of the coins they used with refe­rence to a “real” anchor value, in order to pro­tect them­sel­ves from los­ses in cur­ren­cy exchan­ge as well as from los­ses due to inflation.

This is exact­ly what the French popu­la­ti­on did when the sta­te sought to cover its finan­cial needs by issuing assi­gnats during the Revo­lu­ti­on and when this assi­gnat cur­ren­cy suc­cum­bed to mas­si­ve inflation.

And this brings us to a cen­tral the­me of Spang’s book, the assi­gnats. Spang’s cri­tique of the idea of the intrinsic value of gold and sil­ver coins as a “cul­tu­ral fan­ta­sy” is clo­se­ly con­nec­ted with her descrip­ti­on of the histo­ry of the assi­gnats, inde­ed it actual­ly forms its basis. For from the asser­ti­on that the value of pre­cious metal coins does not cor­re­spond to any intrinsic value, she impli­ci­tly deri­ves that the value of the assi­gnats, the paper money crea­ted in the Revo­lu­ti­on, did not need to cor­re­spond to any intrinsic value eit­her (and that the loss of value of the assi­gnats was the­re­fo­re not eco­no­mi­c­al­ly jus­ti­fied). Not that Spang clear­ly shows this con­nec­tion; unfor­tu­n­a­te­ly, such ana­ly­ti­cal and argu­men­ta­ti­ve cla­ri­ty is not to be found in her work, she pre­fers to hint at con­nec­tions rather than to pro­ve them in an ana­ly­ti­cal­ly con­clu­si­ve way. But ulti­mate­ly this is exact­ly the idea she expresses.

The assi­gnats and their value decline

Let us reca­pi­tu­la­te the histo­ry of the assi­gnats here so that we can then bet­ter assess Spang’s view of them.

Even befo­re the out­break of the Revo­lu­ti­on, the French sta­te had beco­me insol­vent, and the Revo­lu­ti­on first cau­sed a col­lap­se of tax reve­nues. Faced with empty cof­fers, the revo­lu­tio­na­ries sought to ensu­re the sol­ven­cy of the sta­te by crea­ting the paper money of the assi­gnats. The idea behind the crea­ti­on of the assi­gnats was that this paper money would be backed by the value of the pro­per­ties of the Catho­lic Church con­fis­ca­ted in the cour­se of the Revo­lu­ti­on (the “biens nation­aux”, “natio­nal goods”), and that the paper money could be used by the citi­zens to purcha­se the­se very goods, with the notes being des­troy­ed again after their “return” to the sta­te. But neit­her were the first issued assi­gnats suf­fi­ci­ent to finan­ce the mone­ta­ry needs of the sta­te, nor were all assi­gnats des­troy­ed again after their “return” to the sta­te. The lack of tax reve­nues, com­bi­ned with the mas­si­ve cos­ts of the Revolution’s defen­si­ve wars against the con­ser­va­ti­ve powers of Euro­pe that were soon to begin, made the pro­duc­tion of ever new assi­gnats necessa­ry to keep the sta­te alive.

In 1789, the value of the con­fis­ca­ted church pro­per­ties had been esti­ma­ted at around 2 to 3 bil­li­on liv­res tour­nois, but by August 1795, assi­gnats worth 11 bil­li­on liv­res had alrea­dy been issued, and by Febru­a­ry 1796 their volu­me had risen to around 45 bil­li­on liv­res[19]. In short, the assi­gnats were far from being secu­red by the value of the church pro­per­ties that had ori­gi­nal­ly been inten­ded as col­la­te­ral. It is the­re­fo­re not sur­pri­sing that at the cli­max of their value decli­ne, the assi­gnats were accep­ted for pay­ment only at a frac­tion of their nomi­nal value: In Janu­a­ry 1794 they were still tra­ded at just over 50% of their face value, only to lose their remai­ning value at an incre­a­sing rate in the cour­se of 1795 par­ti­cu­lar­ly, to a low of 0.5% in Febru­a­ry 1796[20]

The assi­gnats basi­cal­ly repre­sen­ted a kind of pro­mis­so­ry notes of the sta­te which at the same time were sup­po­sed to func­tion as money. Howe­ver, the value of the natio­nal goods ser­ving as col­la­te­ral was far from suf­fi­ci­ent to cover them (des­pi­te the later incre­a­se in the volu­me of the natio­nal goods by the natio­na­li­sed pro­per­ties of the emi­gra­ted nobles and of other enemies of the Revo­lu­ti­on). No won­der that con­fi­dence in the assi­gnats col­lap­sed and that the popu­la­ti­on was wil­ling to accept them as means of pay­ment only at a dis­count to their nomi­nal value.

As pro­mis­so­ry notes, the assi­gnats were no lon­ger trust­worthy due to the lack of cover. Were they trust­worthy as cur­ren­cy, i.e. in their second func­tion into which they incre­a­singly con­ver­ted over time? Ulti­mate­ly, trust in any government debt is depen­dent on trust in the abi­li­ty of the sta­te to ser­vice its lia­bi­li­ties. Equal­ly, con­fi­dence in a cur­ren­cy issued by a sta­te is depen­dent on con­fi­dence in the state’s credit­wort­hi­ness, becau­se ulti­mate­ly — in accoun­ting terms — a cur­ren­cy also repres­ents a lia­bi­li­ty of the sta­te (nowa­days lis­ted as a lia­bi­li­ty in the cen­tral bank’s accounts).

The state’s credit­wort­hi­ness had alrea­dy been dama­ged befo­re the out­break of the Revo­lu­ti­on, as the French king­dom had had to stop its pay­ments in 1788. In order to have new taxes appro­ved, which were necessa­ry to reb­a­lan­ce the state’s finan­ces, the king had then had to con­ve­ne the Esta­tes Gene­ral, which met in 1789 and soon con­sti­tu­ted them­sel­ves as the sole repre­sen­ta­ti­ve of the peop­le — the Natio­nal Assem­bly — and incre­a­singly depri­ved the king of his power. With the Revo­lu­ti­on, the state’s pay­ment cri­sis worsened even fur­ther as tax reve­nues col­lap­sed. Howe­ver, the opti­on to levy taxes is an essen­ti­al pre­re­qui­si­te for the credit­wort­hi­ness of a state.

Not only were the assi­gnats cove­r­ed by col­la­te­ral for just a frac­tion only, but the French state’s abi­li­ty to levy taxes was no lon­ger gua­ran­te­ed after the col­lap­se of the old tax admi­nis­tra­ti­on in the Revo­lu­ti­on had led to a mas­si­ve drop in tax reve­nues, and a new tax admi­nis­tra­ti­on had not yet been estab­lis­hed. It is the­re­fo­re qui­te under­stand­a­ble that the population’s con­fi­dence in both pos­si­ble sup­ports for the credit­wort­hi­ness of the assi­gnats (natio­nal goods and tax reve­nue) col­lap­sed, and that peop­le the­re­fo­re no lon­ger wan­ted to accept the assi­gnats as pay­ment at their nomi­nal value. 

One pos­si­bi­li­ty was for the popu­la­ti­on to make a dif­fe­rence bet­ween the pri­ces for pay­ment in gold and sil­ver coins (with intrinsic value) and the (hig­her) pri­ces for pay­ment in assi­gnats. Such beha­viour, howe­ver, meant that the assi­gnats were not accep­ted at their nomi­nal face value, which was tole­ra­ted until the time of the “Ter­reur”, but was then drasti­cal­ly punis­hed. In the pha­se of the “Ter­reur” (the peri­od of the Revo­lu­ti­on under the lea­ders­hip of Robes­pierre, known as the Reign of Ter­ror, which las­ted from May/June 1793 to July 1794), peop­le even ris­ked the death penal­ty if con­tracts sti­pu­la­ted dif­fe­rent pri­ces for pay­ments in gold and sil­ver coins or in assi­gnats. Only through coer­ci­ve mea­su­res could the sta­te try to enfor­ce that the assi­gnats were accep­ted at their nomi­nal value.

Fix the value of the assi­gnats via the guillotine?

So what is Spang’s explana­ti­on of the decli­ne of the assi­gnats? As always, the first thing she does is to deva­lue other rese­arch contributions:

«His­to­ri­ans have long rea­li­zed that the mone­ta­ry cri­sis of the 1790s is cen­tral to the Revo­lu­ti­on, but they have gene­ral­ly allo­wed clas­si­cal and neo­clas­si­cal eco­no­mics to struc­tu­re how they see it. Wit­hin this frame­work, the fail­u­re of the assi­gnats is always descri­bed as one of quan­ti­ty.” (p. 214)

Here, again, her sweeping state­ment is wrong, the rese­arch con­tri­bu­ti­ons on assi­gnats are diver­se and not limi­ted to the approa­ches of clas­si­cal and neo­clas­si­cal eco­no­mics alone.

After the intro­duc­tion quo­ted abo­ve, Spang then begins a reck­o­ning with the “quan­ti­ty theo­ry of money” (which assu­mes that the amount of money in cir­cu­la­ti­on always has an influ­ence on pri­ces) and its explana­ti­on for the value decli­ne of the assi­gnats (p. 214). For her cri­ti­cism of this theo­ry, howe­ver, Spang refers to a sin­gle book, name­ly a book from 1876 (!) by Andrew Dick­son White, “Paper Money Infla­ti­on in Fran­ce”. Spang sim­ply does not take note of the many con­tri­bu­ti­ons from gene­ral histo­ry and from eco­no­mic and mone­ta­ry histo­ry that have appeared up to the pre­sent day which deal with the sub­ject of the assi­gnats in com­plex ana­ly­ses. In the­se con­tri­bu­ti­ons, in addi­ti­on to the topic of the over-issu­an­ce of assi­gnats, the poli­ti­cal influ­en­cing fac­tors that con­tri­bu­t­ed to their over-issu­an­ce (the domestic poli­ti­cal strug­gles, the needs of natio­nal defence, i.e. the “defence of the Revo­lu­ti­on”, etc.) are very well men­tio­ned and ana­ly­sed, but they all con­si­der the exces­si­ve volu­me of the assi­gnats issued as the essen­ti­al rea­son for their failure.

Spang, howe­ver, cate­go­ri­cal­ly rejects the argu­ment that the sheer volu­me of assi­gnats issued could have anything to do with their deva­lua­ti­on and demi­se. In doing so, she argues as if it had been wit­hin the power of the mem­bers of the Con­ven­ti­on (the “law­ma­kers”, as she calls the mem­bers of par­lia­ment in the US-Ame­ri­can way) to give vali­di­ty to the assi­gnats and to pre­ser­ve their cour­se. With coer­ci­ve mea­su­res such as the abo­ve-men­tio­ned thre­at of the guillotine?

Else­whe­re, Spang beco­mes expli­cit in this regard, par­ti­cu­lar­ly whe­re she speaks of the dis­cus­sions of the “law­ma­kers” in the years 1790–1792 as to whe­ther or not money should be regar­ded as a com­mo­di­ty like any other, which one should be able to tra­de free­ly. In other words, whe­ther one should be able to free­ly exchan­ge “money” (read: assi­gnats) and pre­cious metals for each other, with the rate being set free­ly. Spang comments on the­se dis­cus­sions as follows:

«As long as money’s value was unders­tood as deter­mi­ned by mar­ket mecha­nisms, the nati­on was not real­ly sov­er­eign over it. And as long as the law allo­wed – in fact encou­ra­ged – indi­vi­du­als to tra­de in money as they did in any other good, for­mal legal equa­li­ty was lar­ge­ly mea­ningless in the mar­ket­place.” (p. 145)

Impli­ci­tly, Spang is sup­por­ting a diri­gis­te — ulti­mate­ly dic­ta­to­ri­al — coer­ci­ve eco­no­my here, name­ly the enfor­ce­ment of the nomi­nal value of the assi­gnats by the guil­lo­ti­ne. Not even the repre­sen­ta­ti­ves of the Modern Mone­ta­ry Theo­ry (MMT), popu­lar among many on the left today, which stron­gly invo­kes the “mone­ta­ry sov­er­eig­n­ty” of a coun­try, get car­ri­ed away to the asser­ti­on that the sov­er­eign sta­te must also be able to deter­mi­ne the exchan­ge rate or the value of the cur­ren­cy it crea­tes. On the con­tra­ry, in MMT it is pre­cise­ly infla­ti­on who­se extent is accep­ted as the only limit to the “sov­er­eign” money crea­ti­on of the sta­te. Also, it is not under­stand­a­ble why exact­ly a coer­ci­ve mea­su­re such as the ban on cur­ren­cy tra­ding is sup­po­sed to save the free­dom and equa­li­ty of citi­zens! As is so often the case, Spang sim­ply lea­ves it at that with an asser­ti­on that is sup­po­sed to pro­ve her “good” atti­tu­de. The important thing is to show that one stands on the side of “good” and “jus­ti­ce”, even if this leads to dic­ta­to­ri­al mea­su­res such as enfor­cing the “just” value of a cur­ren­cy by coer­ci­on — if necessa­ry by the guil­lo­ti­ne, as during the “Ter­reur”.

Spang is even more expli­cit in ano­t­her instance:

«[….] it was only from April 1793 to autumn 1794 that posi­ti­ve laws man­da­ting the cir­cu­la­ti­on of paper and coin based on their face values alo­ne repla­ced lais­sez-fai­re poli­ci­es groun­ded in the idea of gold or silver’s intrinsic, ‘natu­ral’ worth. In other words, only during ‘the Ter­ror’ did the revo­lu­tio­na­ry sta­te tre­at money as some­thing it had the right to patrol and poli­ce, only during ‘the Ter­ror’ was money dim­ly reco­gni­zed for the poli­ti­cal and social con­ven­ti­on it is.” (p. 236)

One has to read this pas­sa­ge twice to clear­ly reco­gni­se the mons­tro­si­ty hid­den in it. Only during the time of the “Ter­reur” was money weak­ly reco­gnis­able as the “poli­ti­cal and social con­ven­ti­on” that it actual­ly is, and that was so becau­se during this time the nomi­nal value of the paper cur­ren­cy (i.e. the assi­gnats) was enfor­ced as valid by law. In other words, a poli­ti­cal and social con­ven­ti­on such as con­fi­dence in a cur­ren­cy does not ari­se from a pro­cess of free decisi­on by the peop­le, but rather from the mea­su­res of the sta­te enfor­ced with coer­ci­on — i.e. with the guil­lo­ti­ne! So much for Spang’s con­cept of free­dom! Fuz­zy thin­king, lack of exper­ti­se, and ideo­lo­gi­cal bias com­bi­ne into an unplea­sant mix here. One is incli­ned to say: “The sleep of rea­son pro­du­ces monsters”.

Accord­ing to Spang, only in the time of the “Ter­reur” did the sta­te not pur­sue a “lais­sez-fai­re” poli­cy, based on the view of the intrinsic value of gold or sil­ver coins that was con­si­de­red as “natu­ral”. “Lais­sez-fai­re” poli­cy is used here by Spang as a kil­ler term that indiscri­mi­na­te­ly dis­avows any other pos­si­ble poli­cy that is not based on radi­cal coer­ci­ve mea­su­res. Spang does not give a defi­ni­ti­on of the term “lais­sez-fai­re” poli­cy; the word is basi­cal­ly just ano­t­her atti­tu­de mar­ker, sin­ce in the left’s view the term stands for a radi­cal­ly mar­ket-ori­en­ted form of capi­ta­lism without any social safe­ty nets.

The fact that the mar­ket atta­ches an intrinsic value to gold and sil­ver coins is not some­thing Spang allows to be an expres­si­on of a scar­ci­ty rela­ti­on; rather, the mar­ket value of the coins is fun­da­ment­al­ly irra­tio­nal for her. By dis­avowing the idea of the intrinsic value of gold or sil­ver coins as a “cul­tu­ral fan­ta­sy”, she crea­tes the pre­con­di­ti­on for con­si­de­ring the value of any cur­ren­cy as arbi­tra­ry, as out­side and inde­pen­dent of any eco­no­mic rea­li­ty, and the­re­fo­re as arbi­tra­ri­ly deter­min­ab­le by the sta­te. As has been said befo­re: one won­ders whe­ther Spang lives in a dif­fe­rent universe.

A two-tier socie­ty of money circulation?

The princip­le upheld by the Natio­nal Assem­bly and the sub­se­quent Con­sti­tu­an­te in the years 1790–1792, that assi­gnats and pre­cious metals should be free­ly exch­an­ge­ab­le for each other (which de fac­to meant that assi­gnats were tra­ded far below their nomi­nal value), is inter­pre­ted by Spang as an impli­cit decisi­on by par­lia­ment to divi­de socie­ty into two clas­ses, with the poor being fed off with the worth­less paper money. The fol­lowing pas­sa­ge, in which this is addres­sed, can only be repro­du­ced as a who­le, only in its full form does it allow us to fol­low the arbi­tra­ry con­nec­tion bet­ween the­mes that Spang per­forms here:

«By endor­sing the cir­cu­la­ti­on of gold and sil­ver coins along­side natio­nal paper bills without man­da­ting equal exchan­ge bet­ween them, the Con­sti­tu­ent and Legis­la­ti­ve Assem­blies crea­ted a mone­ta­ry ver­si­on of the dis­tinc­tion bet­ween acti­ve and pas­si­ve citi­zenship. Like an acti­ve citi­zen who­se wealth, age, sex, and domic­i­led sta­tus qua­li­fied him for the vote and to hold elec­ted office, a sil­ver or gold coin had sup­po­sed­ly intrinsic qua­li­ties that ear­ned it its role as money. Sil­ver was ‘dura­ble’, adult men with per­ma­nent homes and a cer­tain inco­me were ‘respon­si­ble’. In con­trast, pas­si­ve citi­zens (all women and child­ren, the homeless or iti­nerant, and tho­se who­se year­ly tax pay­ments fell below a cer­tain level) were like paper money: they belon­ged to the nati­on but they lacked the sup­ple­men­tal attri­bu­tes that pro­du­ced a dif­fe­ren­ti­al posi­ti­on in the mar­ket as well. Acti­ve and pas­si­ve, metal and paper, all had the same stamp – all were the same befo­re the law – but for the lat­ter group of citi­zens this would pro­ve a poor con­so­la­ti­on pri­ze.” (p. 167)

One almost has trou­ble tran­scrib­ing the mul­ti­tu­de of con­nec­tions made here bet­ween all and ever­ything. All the con­nec­tions made here by Spang are not dedu­ced in a clear ana­ly­ti­cal way, but con­nec­tions are sim­ply insi­nua­ted or inven­ted without being sub­stan­tia­ted by empi­ri­cal evi­dence. This also app­lies to her state­ment on the two-tier socie­ty of money cir­cu­la­ti­on and to her asser­ti­on that the poor peop­le have been most har­med by the col­lap­se in the value of assignats. 

Of cour­se, the­re were dif­fe­ren­ces in the typi­cal cir­cu­la­ti­on of money and in the typi­cal uses of money at the dif­fe­rent levels of socie­ty or bet­ween the dif­fe­rent social clas­ses. But Spang’s remarks on this topic do not sub­stan­tia­te the­se dif­fe­ren­ces with con­cre­te examp­les; they are rather a fur­ther instance of “crea­ti­ve wri­ting”. How to approach this topic ana­ly­ti­cal­ly, and at the same time make the social dimen­si­on vivid­ly spe­ci­fic and com­pre­hen­si­ble, is demons­tra­ted by Jérô­me Blanc’s short essay on the social­ly dif­fe­rent uses of the various forms of money in the Anci­en Régime befo­re the Revo­lu­ti­on: “La com­ple­xi­té moné­taire en Fran­ce sous l’An­ci­en régime[21].

Inci­dent­al­ly, it is not jus­ti­fia­ble to descri­be the poor peop­le alo­ne as vic­tims of the assi­gnats’ value decli­ne, as Spang does. Low-deno­mi­na­ti­on assi­gnats were only avail­ab­le sin­ce Janu­a­ry 1792, and tho­se of high deno­mi­na­ti­on were hard­ly in the hands of the com­mon peop­le. The­re­fo­re, not only poor peop­le held worth­less assi­gnats in their hands, but so did nume­rous wealt­hy citi­zens who lost their for­tu­nes in this way. Even though the­re were cer­tain­ly many spe­cu­la­tors who mana­ged to enrich them­sel­ves in dealing with the assi­gnats, pro­vi­ded they had the appro­pria­te instinct for “mar­ket timing”, i.e. for the right time to get in or out. 

It is undoub­ted­ly a fact that the Revo­lu­ti­on, with its huge social uphea­vals, brought about a mas­si­ve redis­tri­bu­ti­on of wealth, and that the expe­ri­ment of the assi­gnats con­tri­bu­t­ed to this. Who were the win­ners and the losers? Unfor­tu­n­a­te­ly, I know of no stu­dy that would descri­be this redis­tri­bu­ti­on of wealth com­pre­hen­si­ve­ly and may­be even in a quan­ti­fied way (hints wel­co­me!) but only some more illus­tra­ti­ve indi­vi­du­al examp­les. One can easi­ly ima­gi­ne a citi­zen who buys a pro­per­ty from the natio­na­li­sed church pro­per­ties or noble esta­tes — say, for examp­le, a small cast­le with land hol­dings — at a favoura­ble pri­ce which he pays for with assi­gnats that are accep­ted at their nomi­nal value when he buys the cast­le, but which he hims­elf had pre­vious­ly acqui­red at a dis­count, i.e. at a pri­ce below their nomi­nal value (thus acqui­ring a high-value pro­per­ty with low-value money and achie­ving a cor­re­spon­ding incre­a­se in wealth). But the­re were also nume­rous small peas­ants who, in one way or ano­t­her, acqui­red a pie­ce of land from the natio­nal goods. In fact, the Revo­lu­ti­on crea­ted a broad class of new pro­per­tied citi­zens in the cities and in the coun­try­si­de, who later were still an important pil­lar also for Napoleon’s power and who fought as high­ly moti­va­ted sol­di­ers in his armies, sin­ce he gua­ran­te­ed them their new pro­per­ty. His sei­zu­re of power put an end to the tur­moil of the Revo­lu­ti­on, in which they had attai­ned their new wealth, but if it con­ti­nued they had to fear losing their pos­ses­si­ons again. To mea­su­re the Revo­lu­ti­on against a maxi­mum requi­re­ment, accord­ing to which it would only have suc­cee­ded with the attain­ment of mate­ri­al equa­li­ty for all, is sim­ply to exp­lain away the rela­ti­ve pro­gress it brought as a failure.

«Money and stuff»

In the pas­sa­ge quo­ted abo­ve, Spang again speaks of the “sup­po­sed­ly intrinsic qua­li­ties” of sil­ver and gold coins. We alrea­dy know this topic. Howe­ver, Spang calls the noti­on of intrinsic value a “cul­tu­ral fan­ta­sy” not only in rela­ti­on to coins made of pre­cious metals, but also in rela­ti­on to all other types of “com­mo­di­ty money” that the French popu­la­ti­on was resor­ting to at the time:

«Wri­ting con­tracts spe­ci­fy­ing pay­ment in ‘gold coins’ or, for the rent of rural pro­per­ties, in red or grey par­tridges, fat­te­ned geese, and bus­hels of grain, indi­vi­du­als attemp­ted to pro­tect them­sel­ves and their pro­per­ty from fur­ther revo­lu­ti­on by posi­t­ing that a gold coin would always be a gold coin, that a par­tridge was always a par­tridge. [….] As ‘land’ had been for the assi­gnats’ pro­pon­ents (even so a sizab­le per­cen­ta­ge of the Church’s pro­per­ty con­sis­ted of urban buil­dings), so gold, sil­ver, and agri­cul­tu­ral goods were for the­se con­tracts – a cul­tu­ral fan­ta­sy of value made all the more power­ful by not being ima­gi­ned as human con­struc­tion.” (p. 238)

Are all peop­le who try to invest their wealth in gold or other com­mo­di­ties in a coun­try plagued by high infla­ti­on suc­cum­bing to a “cul­tu­ral fan­ta­sy”? For per­so­nal sur­vi­val, is not a real par­tridge perhaps a bet­ter invest­ment than con­ti­nuing to hold a bank­no­te that will only buy me half a par­tridge or even less tomor­row? Do the­se peop­le only want to pro­tect their assets from fur­ther revo­lu­ti­on real­ly, or are they not perhaps afraid for their phy­si­cal sur­vi­val? Does Spang recom­mend that all inha­bi­tants of coun­tries like Argen­ti­na, Vene­zue­la or other infla­ti­on-rid­den coun­tries store their incre­a­singly worth­less money? And if they don’t, for examp­le in order to be able to feed their child­ren tomor­row, are they coun­ter-revo­lu­tio­na­ries? Does she recom­mend to the governments of the­se coun­tries to fix the value of money by law and by coer­ci­ve mea­su­res, and to imple­ment the­se dra­co­ni­cal­ly, if necessa­ry by means of the guillotine? 

Let’s move on to the con­clu­ding “fin­dings” that Spang claims to have sub­stan­tia­ted in her book.

«Ope­ra­ting wit­hin the faux-mate­ria­list per­spec­ti­ve that nar­ra­tes the histo­ry of money as a dif­fi­cult, perhaps mis­gui­ded, tran­si­ti­on from sub­s­tance to abs­trac­tion (from metal to paper), the assi­gnats’ intro­duc­tion and even­tu­al with­dra­wal pro­vi­de logi­cal-see­ming chro­no­lo­gi­cal bounda­ries. In con­trast, howe­ver, this book insists that paper, per se, was never the defi­ning issue. Most tran­sac­tions befo­re the Revo­lu­ti­on had, after all, been made on or in paper. Many cham­bers of com­mer­ce both oppo­sed the issue of more assi­gnats in Sep­tem­ber 1790 and actively sup­por­ted local issu­ers of bil­lets de con­fi­an­ce. When Pari­sians from the fau­bourgs mar­ched into the Con­ven­ti­on on Prai­ri­al 1, Year III, they cal­led not for a return to some mythi­cal gold or sil­ver stan­dard but for laws enfor­cing the cir­cu­la­ti­on of paper at face value. Paper was not the pro­blem. Poli­tics — the strugg­le for cul­tu­ral legi­ti­ma­cy and eco­no­mic power among indi­vi­du­als defi­ned in regio­nal, social, and ideo­lo­gi­cal terms – poli­tics was the pro­blem.» (p. 248–249)

If the ope­ning sen­tence seems a bit con­vo­lu­t­ed to you, you are not alo­ne. One won­ders what the sen­tence is sup­po­sed to say. It is almost a cari­ca­tu­re of aca­de­mic wri­ting. But let’s move on.

At the end, Spang con­clu­des: “poli­tics was the pro­blem”. Howe­ver, the state­ment is not fol­lo­wed by anything that would make clear which strug­gles for power among which indi­vi­du­als play­ed a role here; Spang does not men­ti­on any names. And has­n’t the dis­cus­sion in histo­ry so far rather been about strug­gles bet­ween social groups (or clas­ses) with dif­fe­rent inte­rests than about strug­gles bet­ween indi­vi­du­als? Spang does not say a word about this topic eit­her. The word “poli­tics” is an empty phra­se that is not fil­led with fur­ther con­tent, ano­t­her “mar­ker”.

Many other points in the pas­sa­ge quo­ted abo­ve are ques­tion­ab­le or unclear, but in the fol­lowing we want to con­cen­tra­te on Spang’s state­ment “Paper was not the pro­blem” from the same pas­sa­ge. The state­ment is sim­ply wrong. It is abso­lute­ly untrue that the­re was never a pro­blem with paper money in the Anci­en Régime.

Let us men­ti­on first the fail­u­re of the “sys­tème de John Law” (1716 to 1720) during the Régence of Phil­ip­pe d’Or­lé­ans after the death of Lou­is XIV. It was an attempt, pro­mo­ted by the Scots­man John Law, to crea­te a paper cur­ren­cy in Fran­ce simi­lar to the pound notes issued by the Bank of Eng­land (foun­ded in 1694). After foun­ding his Ban­que Géné­ra­le, which was gran­ted the pri­vi­le­ge of issuing bank­no­tes (gua­ran­te­ed by the sta­te) by the Regent, Law con­ti­nued to expand his “sys­tem” fur­ther and fur­ther by acqui­ring several com­pa­nies for the explo­ita­ti­on of the French colo­nies, from who­se future pro­fits Law pro­mi­sed inves­tors unhe­ard-of riches. The­se take­overs were finan­ced by issuing more and more shares. A huge and hys­te­ri­cal spe­cu­la­ti­on aro­se that took hold of wide cir­cles of socie­ty and cau­sed the pri­ce of the share (the bank and the colo­ni­al com­pa­ny had been mer­ged in the mean­ti­me) to sky­ro­cket to astro­no­mi­c­al heights, until the con­fi­dence of the inves­tors in Law’s pro­mi­ses for the future col­lap­sed, resul­ting in a cri­sis and in bankrupt­cy (and in Law’s flight to Veni­ce). Many of the insi­ders among the spe­cu­la­tors had secu­red their pro­fits in time and inves­ted them in gold or other safe assets[22]. Many others, howe­ver, who had held on to the now worth­less papers, lost ever­ything. The bank notes had beco­me worth­less. The crea­ti­on of a natio­nal French paper cur­ren­cy was thus off the table for deca­des, until the expe­ri­ment with the assignats.

But also for later times, and in par­ti­cu­lar for the time immedia­te­ly befo­re the Revo­lu­ti­on, the state­ment “paper was not the pro­blem” is wrong. When Spang says that befo­re the Revo­lu­ti­on many tran­sac­tions were car­ri­ed out with “paper”, one can agree with her state­ment in this gene­ral form, but this “paper” was defi­ni­te­ly a pro­blem. It was not a natio­nal cur­ren­cy in paper form that was used, but rather short-term pay­ment orders, pro­mis­so­ry notes or IOUs issued by sta­te offices or tax far­mers that ser­ved as a means of pay­ment. All the­se papers were ulti­mate­ly backed by tax reve­nues due in the future — just as Euge­ne White says in the sen­tence alrea­dy quo­ted: “Most of the government’s short-term debt took the form of tax anti­ci­pa­ti­ons — assi­gna­ti­onsbil­letsde fer­mes, or rescrip­ti­ons.”[23] Pre­cise­ly becau­se the French king­dom did not have a public bank along the lines of the Bank of Eng­land, foun­ded in 1694, it reli­ed hea­vi­ly on the­se short-term papers (which cir­cu­la­ted also among the wider public as a means of pay­ment) for its short-term liquidity. 

Did this paper real­ly not pose a pro­blem, as Spang claims? Let us take a clo­ser look.

The tax far­mers (“fer­miers”; tax lea­se = “fer­me”) play­ed an important role in the finan­cial sys­tem of the Anci­en Régime[24]. Theirs were venal offices, gran­ted by the king in exchan­ge for a purcha­se amount. They were on the one hand public offi­cials, but acted as pri­va­te busi­ness­men and were allo­wed to pur­sue pri­va­te busi­ness in addi­ti­on to their offi­cial duties. They were respon­si­ble for collec­ting spe­ci­fied taxes in their geo­gra­phi­cal area of respon­si­bi­li­ty and for for­war­ding them to the roy­al admi­nis­tra­ti­on, often gran­ting advan­ces to the mon­ar­chy for its cur­rent needs, the afo­re­men­tio­ned short-term loans, which were ulti­mate­ly cove­r­ed by future tax reve­nues. Their debt papers, which also cir­cu­la­ted among the wider public, were con­stant­ly rene­wed or exten­ded and their volu­me was con­stant­ly expan­ded, so that even­tual­ly the future tax reve­nues of the “fer­miers” were alrea­dy mor­tga­ged for years to come.

Their short-term debt papers did not repre­sent a lia­bi­li­ty of the king­dom, the tax far­mers were liable for the­se papers as pri­va­te indi­vi­du­als. But the­se papers’ matu­ri­ty could not be pro­lon­ged inde­fi­ni­te­ly, let alo­ne could their volu­me be incre­a­sed at dis­cre­ti­on. When in the second half of the 1780s, due to the dete­rio­ra­ting eco­no­my, both the taxes collec­ted by the tax far­mers decli­ned and their pri­va­te busi­nes­ses suf­fe­red, some pro­mi­nent repre­sen­ta­ti­ves from their ranks went bankrupt in 1787, which quick­ly tur­ned into a finan­cial cri­sis for the king­dom. The short-term credit papers of the tax far­mers beca­me less and less accep­ted in the mar­ket, as their credit­wort­hi­ness was no lon­ger trus­ted. The other short-term credit papers (“assi­gna­ti­ons”, etc.) issued by the government its­elf were also less and less accep­ted in the mar­ket, as they too were ulti­mate­ly cove­r­ed by future tax reve­nues which the mar­ket no lon­ger belie­ved would mate­ria­li­se in suf­fi­ci­ent volu­me. Thus, fur­ther to the col­lap­sed tax reve­nues, the short-term debt papers were no lon­ger avail­ab­le to the king­dom as a source of finan­cing, and long-term loans were hard­ly gran­ted to the king­dom any­mo­re due to its pay­ment dif­fi­cul­ties — with the result that the king­dom could no lon­ger ful­ly meet its finan­cial obli­ga­ti­ons. Out­stan­ding pen­si­on pay­ments had to be par­ti­al­ly post­po­ned in 1787, and other pay­ments by the sta­te were also made irre­gu­lar­ly or were omit­ted. Thus, in 1787, the sta­te bankrupt­cy of the fol­lowing year was alrea­dy dis­cern­ab­le: The cata­stro­phic wea­ther con­di­ti­ons and the fai­led har­vest of 1788 aggra­va­ted the situa­ti­on, the eco­no­mic slump led to a fur­ther col­lap­se of tax reve­nues and to a total dry­ing up of all sources of credit — in August 1788, the king­dom was for­ced to stop its pay­ments, a de fac­to sta­te bankrupt­cy occur­red, while at the same time the coun­try was grip­ped by hun­ger revolts and the public order began to collapse.

It was this de fac­to sta­te bankrupt­cy that for­ced the king in August 1788 to give in to the pres­su­re to con­ve­ne the Esta­tes Gene­ral (“États Géné­raux”), which he had resis­ted for years, in order to reb­a­lan­ce the state’s finan­ces by get­ting new taxes gran­ted. The Esta­tes Gene­ral, which had been con­ve­ned for the last time in 1614 (!), were, accord­ing to gene­ral opi­ni­on, the only aut­ho­ri­ty that had the com­pe­tence to grant new taxes. The king hoped to be able to dis­sol­ve them again after the appro­val of new taxes. Howe­ver, with the con­vo­ca­ti­on of the Esta­tes Gene­ral, which in May 1789 con­ve­ned for the first time, ano­t­her dyna­mic was set in moti­on that the king could no lon­ger con­trol: the French Revo­lu­ti­on[25]. The Esta­tes Gene­ral con­sti­tu­ted them­sel­ves as the Natio­nal Assem­bly, the sole repre­sen­ta­ti­ve of the peop­le, they resis­ted being dis­sol­ved and incre­a­singly took over the power ins­tead. This dyna­mic, though, had been set in moti­on by the sta­te bankrupt­cy of 1788, for which the col­lap­se of con­fi­dence in the short-term credit papers had play­ed a major role. So much for “Paper was not the problem”!

Spang’s state­ments do not offer any new insights into the Revo­lu­ti­on, but rather blur and obfus­ca­te or even sim­ply mis­judge what we know about the Revo­lu­ti­on from pre­vious rese­arch. Her work is not an advan­ce in the sta­te of rese­arch, but a step back­wards behind pre­vious knowledge. 

Unfa­mi­lia­ri­ty with the topic of rese­arch — fur­ther evidence

The accu­sa­ti­on of “feuil­le­to­nism” and of unfa­mi­lia­ri­ty with the topic of rese­arch is not a minor one, and I the­re­fo­re feel obli­ged to pro­vi­de clear evi­dence of what I mean by this. That is why this chap­ter brings some more examp­les that I think are drastic.

First examp­le. Spang writes: 

«The exten­si­ve credit eco­no­my of the eigh­te­enth cen­tu­ry was not a ‘bub­ble’. It was not fated to pop. Other scho­l­ars have been incli­ned to reach this con­clu­si­on, but it seems a fail­u­re of his­to­ri­cal ima­gi­na­ti­on to label the Old Regime credit eco­no­my ‘unsus­tainab­le’. True enough, after 1789–1793 it was lar­ge­ly not sus­tai­ned, but that acci­dent of histo­ry does not suf­fice to decla­re it alrea­dy struc­tu­ral­ly unsound in 1782 or even in 1785. Sus­tainab­le, it may well have been. Shock pro­of, it was not.” (p. 56)

One rubs one’s eyes! Spang claims that the credit eco­no­my of the Anci­en Régime was not “unsus­tainab­le” but only beca­me so through the “acci­dent of histo­ry” of the Revo­lu­ti­on. Howe­ver, the Revo­lu­ti­on was not an “acci­dent of histo­ry” that had not­hing to do with the sta­te of the public finan­ces. Rather, the sta­te of the public finan­ces was one of the direct cau­ses of the Revo­lu­ti­on, as we saw in the last chapter! 

Which “credit eco­no­my of the eigh­te­enth cen­tu­ry” is Spang tal­king about when she claims that it “was not fated to pop”? The credit eco­no­my of the pri­va­te sec­tor or of the sta­te? Let us assu­me that she is tal­king about the sta­te finan­ces and the credit of the king­dom. But this credit did not start to fal­ter in the years 1789–1793, rather the “bub­ble” had alrea­dy burst in 1788, when the king­dom had to stop its pay­ments and a de fac­to sta­te bankrupt­cy occur­red. So much for “was not fated to pop”! 

Moreo­ver, the lite­ra­tu­re on the finan­cial cri­sis of the Anci­en Régime demons­tra­tes that the public debt was inde­ed “struc­tu­ral­ly unsound”, not becau­se of its abso­lu­te size but becau­se of the ine­qui­ta­ble dis­tri­bu­ti­on of the tax bur­den, the inef­fi­ci­en­cy in tax collec­tion, and the lack of trans­pa­ren­cy and legi­ti­ma­cy of a mon­ar­chy who­se finan­cial beha­viour was not sub­ject to par­lia­men­ta­ry con­trol (as was alrea­dy the case in the United King­dom at the time). And “struc­tu­ral­ly unsound” was not only the natio­nal debt, but also the struc­tu­re of the French sta­te, becau­se the Third Esta­te, which made up over 98% of the popu­la­ti­on of Fran­ce and bore the bulk of the taxes, was not repre­sen­ted in any form in the insti­tu­ti­ons of the sta­te. It is not sur­pri­sing that the Third Esta­te used the oppor­tu­ni­ty of the Esta­tes Gene­ral to push through a defi­ni­ti­ve reform of the sta­te and its insti­tu­ti­ons and to secu­re its own place in the­se for the long term. Spang, who else­whe­re empha­si­zes her inte­rest in “poli­tics”, could have stu­di­ed a model “case stu­dy” of poli­ti­cal eco­no­my here, but she igno­res the subject.

In the abo­ve pas­sa­ge, Spang accu­ses other rese­ar­chers of “a fail­u­re of his­to­ri­cal ima­gi­na­ti­on”. Well, one would like to see less “ima­gi­na­ti­on” and more his­to­ri­cal and fac­tu­al exper­ti­se in Spang herself!

Let us move on to the next example:

«In 1791, after two years of tru­ly unpre­ce­den­ted chal­len­ges to roy­al aut­ho­ri­ty, [….] thousands of inves­tors [….] still thought of the Crown’s ren­tes via­gè­res as safe invest­ments. One easy way to exp­lain this per­cep­ti­on would be that eco­no­mic thin­king sim­ply did not keep pace with other sorts of chan­ge, that people’s finan­cial expec­ta­ti­ons ‘lag­ged behind‘ trans­for­ma­ti­ons in poli­ti­cal cul­tu­re. French men and women, in other words, did not ful­ly under­stand the chan­ging world in which they lived. Yet it is also worth con­si­de­ring that the rela­ti­on bet­ween new-style revo­lu­ti­on and old-style invest­ment may have been as dialec­ti­cal as it was line­ar.” (p. 31)

Con­tra­ry to Spang’s account, the­re is not­hing con­tra­dic­to­ry in the fact that inves­tors in 1791 con­ti­nued to belie­ve in the value of life annui­ties. They right­ly regar­ded them not as an obli­ga­ti­on of the king but of the sta­te. As hol­ders of life annui­ties, many citi­zens had cri­ti­cis­ed the finan­cial beha­viour of the mon­ar­chy which had had to inter­rupt its pen­si­on pay­ments in 1788, and they hoped that the Revo­lu­ti­on would impro­ve the state’s com­pli­an­ce with its pay­ment obli­ga­ti­ons. The poli­ti­cal uphea­vals were not a rea­son per se to aban­don the­se expec­ta­ti­ons. That peop­le — ano­t­her of Spang’s state­ments — did not ful­ly under­stand the world that was chan­ging around them is a com­mon­place truth that does not only app­ly under the con­di­ti­ons of a Revo­lu­ti­on. In fact, even in 1791, the future was not yet clear­ly deter­mi­ned, but open, so why should inves­tors have adjus­ted their expec­ta­ti­ons alrea­dy? Talk of the rela­ti­ons­hip bet­ween “new-style revo­lu­ti­on and old-style invest­ment” is not­hing but empty talk, as is the state­ment that this rela­ti­ons­hip “may have been as dialec­ti­cal as it was line­ar” (typi­cal­ly in the sub­junc­ti­ve mood and not in the form of a clear state­ment — and sure, “dialec­ti­cal” and “line­ar” always sound good).

Examp­le three: 

«The offi­cial public defi­ni­ti­on of ‘money’ exten­ded only to coins pro­du­ced by the king’s mints, but that abso­lu­tism did not pene­tra­te very far into many sec­tors of the eco­no­my. Ins­tead, even the roy­al house­hold ran a debt for most of its purcha­ses and even the sta­te issued a bewil­de­ring varie­ty of cir­cu­la­ting short-term papers. The poli­ti­cal cate­go­ry of money and the credit mecha­nisms actual­ly at work in the eco­no­my regu­lar­ly diver­ged.” (p. 13)

I do not know which “offi­cial” defi­ni­ti­on of money Spang is refer­ring to. No mone­ta­ry his­to­ri­an would focus sole­ly on coi­ned money when tal­king about the mone­ta­ry sys­tem of the Anci­en Régime (or inde­ed of any other coun­try), and she or he would not tout it as a new dis­co­very that the king­dom lived on credit and that in addi­ti­on to coi­ned money the­re were also short-term credit papers that func­tion­ed as money. All well-known facts. The exis­tence of the public debt also has not­hing to do with the fact that abso­lu­tism did not pene­tra­te far into many are­as of the eco­no­my, as Spang wri­tes. And to talk of the sta­te its­elf issuing “a bewil­de­ring varie­ty of cir­cu­la­ting short-term papers” is evi­dence of super­fi­cia­li­ty, sin­ce, as the abo­ve-men­tio­ned quo­ta­ti­on from Euge­ne White[26] shows, the­se short-term credit papers can be clear­ly and con­cise­ly descri­bed and defi­ned. And what is the mea­ning of the sen­tence that the poli­ti­cal cate­go­ry of money and the credit mecha­nisms actual­ly at work in the eco­no­my have regu­lar­ly diver­ged? Money and book money — crea­ted through credits — are one in mone­ta­ry theo­ry, book money is con­si­de­red money just as much as phy­si­cal money. The who­le pas­sa­ge is hot air.

Ano­t­her example:

«His­to­ri­ans, like the revo­lu­tio­na­ries they stu­dy, have been slow to take an inte­rest in how money is manu­fac­tu­red or even in what it loo­ks like. While this era’s eco­no­mic thought and mone­ta­ry poli­cy have been the sub­ject of mul­ti­ple volu­mes, the busi­ness of prin­ting assi­gnats and of min­ting small chan­ge has gone almost com­ple­te­ly unstu­di­ed. Inspi­red by aut­hors such as Karl Marx and Georg Sim­mel, both of whom trea­ted money as the modern world’s chief and most power­ful abs­trac­tion, scho­l­ars have gene­ral­ly been loathe to look at money. After all, surely only fetis­hists and four-year-olds real­ly care what money loo­ks like?” (p. 103)

Typi­cal fea­tures of Spang’s style are united in this pas­sa­ge, the “name-drop­ping”, i.e. mar­kers of eru­di­tion (Marx and Sim­mel), as well as the con­de­scen­si­on towards other rese­ar­chers who are said not to have con­si­de­red one topic, name­ly the pro­duc­tion pro­cess of money. In addi­ti­on, this asser­ti­on again con­tains a fal­se state­ment, becau­se it is not cor­rect regar­ding the pro­cess of “min­ting small chan­ge” high­ligh­ted by Spang; see the book by Sargent/Velde, “The big pro­blem of small chan­ge”, we dis­cus­sed ear­lier[27]. Sargent/Velde defi­ni­te­ly do deal with the pro­duc­tion pro­cess of small chan­ge coins; howe­ver, they do so in con­nec­tion with rele­vant issu­es like the rela­ti­ve share of metal value, min­ting cos­ts and min­ting pro­fit as well as the deve­lo­p­ment of for­ge­ry-pro­of min­ting tech­ni­ques — issu­es that were important for all metal coins (cop­per, sil­ver, gold) at the time. But with paper money, who­se value is almost inde­pen­dent of its pro­duc­tion cos­ts, the pro­duc­tion pro­cess is hard­ly rele­vant any­mo­re, or at most with regard to issu­es of coun­ter­feit pro­tec­tion. Hence last the ques­ti­on: Do you real­ly under­stand more about the US dol­lar and the US dol­lar domi­nan­ce in the world if you stu­dy the tech­ni­cal prin­ting pro­cess for dol­lar notes? The ans­wer is red­un­dant. The who­le pas­sa­ge abo­ve is hum­bug. And its ending with the “fetis­hists and four-year-olds” belongs direct­ly in the cate­go­ry “crea­ti­ve wri­ting course”. 

And one more:

«This chap­ter the­re­fo­re lea­ves open the pos­si­bi­li­ty that the rela­ti­ons­hip bet­ween the prin­ting of addi­tio­nal money and the currency’s loss of value may have been as much a pro­duct of histo­ry as it was of natu­re – that it may, in fact, have been as com­plex as the rela­ti­on bet­ween indus­tria­liz­a­ti­on and class for­ma­ti­on.” (p. 216)

The sen­tence con­sists of empty phra­ses and con­jec­tures (“…lea­ves open the pos­si­bi­li­ty…”!), which do not com­mit to anything (“…may have been…”! ), and the arbi­tra­ry lin­king of ever­ything with anything is app­lied in dou­ble form here to one iden­ti­cal topic; not only is it said, (a) that the loss of value of the assi­gnats “may have been” just as much a pro­duct of histo­ry as of natu­re (this is in its­elf a pseu­do-pro­fun­di­ty, and the share of “histo­ry” and “natu­re” is not ela­bo­ra­ted fur­ther), but also (b) that the loss of value “may have been” a simi­lar­ly com­plex phe­no­me­non (in safe­guar­ding sub­junc­ti­ve mood!) as the rela­ti­ons­hip bet­ween indus­tria­li­sa­ti­on and class for­ma­ti­on (atti­tu­de mar­ker!). Not a word is said about what the con­cre­te rela­ti­ons­hip bet­ween the loss of value of the assi­gnats on the one hand and indus­tria­li­sa­ti­on and the for­ma­ti­on of social clas­ses on the other hand real­ly is (or might be: one would be gra­te­ful even for a hypo­the­sis!). The­re is no other men­ti­on of indus­tria­li­sa­ti­on in the who­le book, nor of class for­ma­ti­on, even if Spang refers to the “com­mon peop­le” of Paris here and there.

Money, mone­ta­ry histo­ry, mone­ta­ry theory

Con­si­de­ring Rebec­ca Spang’s obvious gaps in under­stan­ding and know­ledge of the sub­ject of money and finan­ce, it is all the more sho­cking that, on the other hand, she allows herself to con­de­scen­din­gly cri­ti­cise the respec­ti­ve works of others. For examp­le, she allows herself to dis­mis­si­ve­ly refer to a com­pre­hen­si­ve work such as Mar­cel Marion’s six-volu­me “His­toire finan­ciè­re de la Fran­ce depuis 1715″ (publis­hed 1914–1931) as a work of “finan­cial histo­ry” in inver­ted com­mas, in other words, as “so-cal­led” finan­cial histo­ry. This is about the same as cal­ling Adam Tooze’s book “Cras­hed” a “so-cal­led histo­ry of the finan­cial cri­sis”, or — allow me the leap — cal­ling Einstein’s theo­ry of rela­ti­vi­ty a work of “so-cal­led phy­sics”. Mari­on is always direct­ly on the sources and knows his sub­ject mat­ter very well, the rea­der can always see and under­stand exact­ly what he is tal­king about, and the fact that Mari­on is oppo­sed to exces­si­ve government debt (which Spang uses as an accu­sa­ti­on against him) does not mean that the facts he pres­ents are wrong or that he has mis­read or mis­quo­ted the sources. Lef­tist his­to­ri­ans, too, pay him their pro­fes­sio­nal respect. 

Spang makes a few cri­ti­cal remarks on neo­clas­si­cal eco­no­mics and belie­ves that she has thus suf­fi­ci­ent­ly dis­avo­wed all approa­ches to under­stan­ding money that con­tra­dict her. Her cri­tique is super­fi­cial and gene­ral, she does not address indi­vi­du­al aut­hors and their theo­ries, and in the pro­cess she sty­li­zes neo­clas­si­cal eco­no­mics into a bogey­man that has not­hing to do with the rea­li­ty of con­tem­pora­ry mone­ta­ry theo­ry. Even wit­hin eco­no­mics its­elf, the gaps of neo­clas­si­cal theo­ry with regard to money and cur­ren­cy have long sin­ce been cri­ti­cis­ed and revi­sed; eco­no­mics has by now deve­lo­ped more com­plex theo­ries on the sub­ject. Just as eco­no­mics today also has more ela­bo­ra­te for­mu­la­ti­ons of the “com­mo­di­ty theo­ry of money”, fer­vent­ly cri­ti­cis­ed by Spang, than the sin­gle work from 1876 cited by her on this topic! 

One can easi­ly for­gi­ve anyo­ne who has dif­fi­cul­ty in actual­ly under­stan­ding the com­plex sub­ject of money. But a his­to­ri­an who wants to wri­te a book about the sub­ject might be expec­ted to make herself well ver­sed in mone­ta­ry theo­ry and histo­ry, and equal­ly to under­stand the tech­ni­cal aspects of the mone­ta­ry sys­tem, so that she is at least immu­ne to the gros­sest errors. Not to do so is like someo­ne taking the liber­ty to wri­te a book on phy­sics without knowing anything about physics.

If Spang had read up on the histo­ry of money and cur­ren­cy, she could have lear­ned what poli­ti­cal and insti­tu­tio­nal con­di­ti­ons were necessa­ry to ensu­re con­fi­dence in a paper cur­ren­cy — con­di­ti­ons that were com­pa­ra­tively absent in Fran­ce during the revo­lu­tio­na­ry peri­od, which is why the expe­ri­ment with the assi­gnats could not suc­ceed. Given the per­ti­nent con­di­ti­ons, howe­ver, also in Fran­ce paper money was able to estab­lish its­elf in the cour­se of the 19th cen­tu­ry, in a com­plex poli­ti­cal and insti­tu­tio­nal pro­cess — without the use of the guillotine. 

Histo­ry or ideology?

Having finis­hed rea­ding Spang’s book, one won­ders what actual­ly her theo­re­ti­cal approach in addres­sing her topic of rese­arch is. The ans­wer, unfor­tu­n­a­te­ly, is that the approach is pri­ma­ri­ly ideological. 

The­re are inde­ed count­less pas­sa­ges in her book whe­re we can dis­cern pre­con­cei­ved ideo­lo­gi­cal views which do not result from the insights gai­ned by the aut­hor but pre­ce­de them and gui­de her per­cep­ti­on. This is the case, for examp­le, with the fol­lowing pas­sa­ge which is to be the last quo­ta­ti­on here and which I am more or less for­ced to repro­du­ce in its ent­i­re length, sin­ce any shor­tening would break the chain of asso­cia­ti­ve con­nec­tions bet­ween the most diver­se topics – unpro­ven by any empi­ri­cal evi­dence or actu­al source. The sub­ject here is the decisi­on of the depu­ties of the Con­ven­ti­on, taken after the fall of Robes­pierre, to allow the free tra­de of gold and sil­ver again — which meant that the assi­gnats no lon­ger had to be tra­ded at their nomi­nal value. 

«Refu­sing to accept that the mem­bers of the crowd con­sti­tu­ted ‘the peop­le’ or that their dai­ly expe­ri­ence of shor­ta­ges and high pri­ces gave them any right to speak on ques­ti­ons of mone­ta­ry poli­cy, legis­la­tors first mar­gi­na­li­zed them dis­cur­si­ve­ly and then, after the vio­lence of Prai­ri­al, repres­sed them with armed for­ce. Tur­ning a deaf ear to the crowd’s asser­ti­on that ‘the assi­gnats are decli­ning in value becau­se of the decrees you pas­sed [such as the aboli­ti­on of the Maxi­mum],’ the mem­bers of the Ther­mi­do­re­an Con­ven­ti­on ins­tead respon­ded by fur­ther dere­gu­la­ting the money tra­de. Short­ly after the Ger­mi­nal upri­sing, they voted to decri­mi­na­li­ze the sale of gold and sil­ver. They also orde­red Cambon’s arrest[28]. (He fled to Lausanne.)

As they retur­ned to the extre­me ver­si­on of free-mar­ket thin­king pre­do­mi­nant in 1789–1792, law­ma­kers again descri­bed money as a good like any other. ‘Real­ly, what would it mean’, asked Jean­bon Saint André, ‘for us to decla­re that sil­ver is a com­mo­di­ty? Isn’t it so by its natu­re? Any law that vio­la­tes the natu­re of things must soo­ner or later be impo­tent.’ Sin­ce gold and sil­ver were ‘uni­ver­sal­ly’ valued, Ver­nier argued, a government that regu­la­ted their cir­cu­la­ti­on also cut its­elf off from inter­na­tio­nal com­mer­ce – fea­si­ble for the Spar­tans and the Incas, such mea­su­res were ‘incon­ceiva­ble’ for a com­mer­cial coun­try such as Fran­ce. From this per­spec­ti­ve, the con­cerns of the actu­al, living men and women of Paris could easi­ly be defi­ned as ‘unna­tu­ral’ (as, by impli­ca­ti­on, were tho­se who expres­sed them). That the Con­ven­ti­on had ever man­da­ted the accep­t­ance of paper and coin on equal terms beca­me, in the cour­se of 1795, sim­ply fur­ther evi­dence of how mons­truous ‘the Ter­ror’ had tru­ly been. 

Repu­dia­ting their ear­lier mone­ta­ry poli­ci­es and igno­ring ordi­na­ry Pari­sians, legis­la­tors in the after­math of Ger­mi­nal moved to end the Revo­lu­ti­on – and ther­eby silence the Paris crowd – by balan­cing the Republic’s account books. (pp. 226–227)

It is almost per­f­idious how Spang for­ges a chain of argu­men­ta­ti­on here that is not sup­por­ted by any actu­al source but is deri­ved sole­ly from her own pre­con­cei­ved ideo­lo­gi­cal meta-theo­ry. Here, too, one has to read several times befo­re one ful­ly under­stands which argu­ments Spang is ser­ving up in empty space, so to speak. For examp­le: The par­lia­men­ta­ri­ans, by con­si­de­ring the free tra­de in gold and sil­ver as a “natu­ral” thing, are sup­po­sed to have impli­ci­tly sacri­fi­ced the con­cerns of the com­mon peop­le of Paris (“the actu­al, living men and women of Paris”) to this fic­tion of the “natu­ral” and to have con­si­de­red the­se con­cerns — and thus the com­mon peop­le them­sel­ves who expres­sed the­se con­cerns — as “unna­tu­ral”. This is an outra­ge­ous con­jec­tu­re without the sligh­test evi­dence. And when Spang accu­ses the par­lia­men­ta­ri­ans of having — with their decisi­on — igno­red and sup­pres­sed the legi­ti­ma­te right of the peop­le to have a say in ques­ti­ons of mone­ta­ry poli­cy, based on their dai­ly expe­ri­ence of scar­ci­ty and high pri­ces, this is simp­le poor-peop­le populism.

In the long pas­sa­ge quo­ted abo­ve, again, Spang’s rejec­tion of the idea of the intrinsic value of gold and sil­ver coins as a “cul­tu­ral fan­ta­sy” stands in the back­ground. But did not the peop­le, other­wi­se so prai­sed by Spang, make the same mista­ke of regar­ding gold and sil­ver coins as more valu­able than deva­lued assi­gnats? The opi­ni­on of the peop­le that the value of the assi­gnats is sin­king becau­se of the decisi­ons taken by the par­lia­men­ta­ri­ans is unques­tio­nin­gly sti­pu­la­ted by Spang as a truth rejec­ted by the par­lia­men­ta­ri­ans. In any case: To sim­ply con­si­der the sedi­tious popu­la­ti­on of Paris, which was often the plaything of various — and not only their own — inte­rests, as the authen­tic repre­sen­ta­ti­on of the ent­i­re com­mon peop­le of Fran­ce is some­what under-com­plex. It pro­ves abo­ve all Spang’s sim­plistic ideo­lo­gi­cal orientation.

Spang does not con­si­der that infla­ti­on might have had other rea­sons than the refu­sal of the par­lia­men­ta­ri­ans to gua­ran­tee the face value of the assi­gnats. Like­wi­se, she does not con­si­der that the poo­rer clas­ses usual­ly suf­fer more from any infla­ti­on than the wealt­hi­er clas­ses who can part­ly pro­tect them­sel­ves against cur­ren­cy deva­lua­ti­on through phy­si­cal assets (houses, land, etc.). The fact that the attempt to sta­bi­li­se the cur­ren­cy could thus impli­ci­tly also bene­fit the poo­rer clas­ses remains unmen­tio­ned. The pri­ce explo­si­on was cau­sed not least by a lack of all the neces­si­ties of life, and nor­mal­ly this lack can­not be reme­di­ed in the long run by pri­ce cei­lings; rather, other incen­ti­ves must also take effect. Given Spang’s love for quo­ta­ti­ons from the com­mon peop­le, she actual­ly should have quo­ted also the shouts with which the peop­le accom­pa­nied Robespierre’s pas­sa­ge to the guil­lo­ti­ne: “Fou­tu le Maxi­mum! ” For the laws on the “maxi­mum” had not only set the upper limit for goods pri­ces, but also the upper limit for wages, under which the working popu­la­ti­on suf­fe­red in the face of infla­ti­on, and for which they held Robes­pierre responsible.

In the abo­ve quo­ta­ti­on, Spang fur­ther claims that the par­lia­men­ta­ri­ans sacri­fi­ced the inte­rests of the com­mon peop­le in order to bring the state’s accounts back into balan­ce through their mea­su­re. Howe­ver, she does not pro­ve this with any source, and it is also sim­ply not true, becau­se in rea­li­ty the state’s finan­ces did not come back into balan­ce at all through this mea­su­re. Spang’s play on words — “silence the Paris crowd — by balan­cing the Republic’s account books” — is again a pure case of “crea­ti­ve wri­ting”. In fact, Spang does not lose a word on the sta­te of the public finan­ces, not only here but not in the who­le book, nor does she quo­te a sin­gle figu­re in this regard. In fact, the who­le book, to men­ti­on this, is without any tables or sta­tis­tics, which is sur­pri­sing for a book on eco­no­mic and mone­ta­ry histo­ry. In any case, the sta­te finan­ces remai­ned off balan­ce, and the ine­vi­ta­ble debt cut did not take place until the reign of the “Direc­toire” (1795–1799): In Sep­tem­ber 1797, the state’s long-term debt, inclu­ding the old debts from befo­re the Revo­lu­ti­on, were cut by two thirds (“la ban­que­r­ou­te des deux tiers”). No men­ti­on of this in Spang. 

In the sen­ten­ces that fol­low the abo­ve quo­ta­ti­on (we refrain from citing ano­t­her ori­gi­nal quo­ta­ti­on here), Spang illus­tra­tes the mea­su­res dis­cus­sed and adop­ted by the par­lia­men­ta­ri­ans to abro­ga­te the assi­gnats. The­se were to retain their vali­di­ty only for a limi­ted peri­od of time, during which time they would still be accep­ted by the sta­te at face value in lieu of pay­ment, but exclu­si­ve­ly for the pay­ment of out­stan­ding debts from the acqui­si­ti­on of natio­nal goods (who­se purcha­se pri­ce had often only been paid up to a small par­ti­al amount yet) and for the pay­ment of out­stan­ding tax debts.

It is not clear why the­se mea­su­res rela­ted to the sus­pen­si­on of the assi­gnats should have har­med only the poor popu­la­ti­on, as Spang claims. With­drawing the assi­gnats from the mar­ket by accep­t­ing them for pay­ment of debts due from the purcha­se of natio­nal goods as well as tax debts actual­ly cor­re­spon­ded to the ori­gi­nal pur­po­se of the assi­gnats and meant that the sta­te kept its own ori­gi­nal pro­mi­ses and obli­ga­ti­ons to the hol­ders of assi­gnats. Spang fails to exp­lain why the­se mea­su­res should have been used to silence the com­mon peop­le, not to men­ti­on to balan­ce the state’s finances.

It is a big and cru­de pole­mi­cal reduc­tion to por­tray the par­lia­men­ta­ri­ans as fail­u­res and enemies of the peop­le and to accu­se them that they could very well have gua­ran­te­ed the value of the assi­gnats and that they had “betray­ed” the com­mon peop­le with their decisi­on. We know from histo­ry the fatal con­se­quen­ces of the char­ge of “betra­yal of the peop­le”, which has been abu­sed enough from left to right. It is not an inno­cent atti­tu­de that one can adopt light­ly, in the cer­tain­ty to be on the right side of history.

The pre­con­cei­ved ideo­lo­gi­cal noti­ons and opi­ni­ons not only shape Spang’s view of the past, but they also ser­ve her to hand out mora­li­sing marks to the per­sons of the past for their good beha­viour or fail­u­re, with the impli­cit per­sua­si­on that the­re would have been a true cor­rect way of acting. In this sen­se, too, Spang’s book is exem­pla­ry and sym­pto­ma­tic sin­ce this atti­tu­de can be found in many works of his­to­ri­cal rese­arch today. The jud­ge­ment or con­dem­na­ti­on of the per­sons of the past is car­ri­ed out accord­ing to the his­to­ri­ans’ own moral cri­te­ria of today. On the one hand, this assu­mes that the per­son wri­ting has a supe­ri­or poli­ti­cal-moral posi­ti­on that can­not be ques­tio­ned, and on the other hand, it assu­mes that the per­sons of the past had an abso­lu­te over­view of the opti­ons given to them at the time and wil­lin­g­ly made wrong — i.e. immo­ral — decisions.

Both claims must be decisi­ve­ly ques­tio­ned. Neit­her can a his­to­ri­an claim to have the only cor­rect poli­ti­cal and moral opi­ni­on, unless he or she mista­kes him- or herself for a grand inqui­si­tor or other ulti­ma­te opi­ni­on aut­ho­ri­ty, nor can we assu­me that the peop­le who acted in histo­ry were endo­wed with abso­lu­te trans­pa­ren­cy about their situa­ti­on — just as litt­le as peop­le today can know with cer­tain­ty in every situa­ti­on which decisi­on is the best one, be it for them­sel­ves or for the gene­ral public. Just as the world of the pre­sent is com­plex and some­ti­mes con­fu­sing, so was the world of the past for the peop­le who lived and worked in it. His­to­rio­gra­phy, while ack­now­led­ging the con­tin­gen­ci­es that ope­ra­ted at any given time, should also ack­now­ledge that histo­ry is not com­ple­te­ly deter­mi­ned in its pro­gres­si­on, that peop­le have at all times had to seek their way in the fog, that they never are and can be unani­mous about this way, and that such unani­mi­ty can­not be desi­red eit­her, sin­ce it would mean the end of freedom.

What have we lear­ned from Spang?

If we try to sum up what we have lear­ned after rea­ding Rebec­ca Spang’s book, the result is meag­re. About money and about the cur­ren­cy and finan­cial sys­tem of the Anci­en Régime and the Revo­lu­ti­on, we learn not­hing that would go bey­ond the fin­dings of pre­vious rese­arch; on the con­tra­ry, ear­lier fin­dings are obscu­red bey­ond reco­gni­ti­on and cove­r­ed by a web of ideo­lo­gi­cal bias; inde­ed, ear­lier fin­dings are in part sim­ply mis­jud­ged or nega­ted. What we come to know, in con­trast, are the ideo­lo­gi­cal views of Spang that cha­rac­te­ri­se her state­ments, all hid­den behind a sym­pa­thy — obvious­ly con­si­de­red as poli­ti­cal­ly cor­rect — for “the com­mon people”.

It would do Spang alrea­dy too much honour to call her a Mar­xist. Her who­le argu­men­ta­ti­on is too fuz­zy and too arbi­tra­ry for that. Rather, her book is the result of a rea­ding of cer­tain his­to­ri­cal docu­ments under­ta­ken with vague lef­tist ide­as and com­mon­place views, and the docu­ments’ selec­tion and inter­pre­ta­ti­on is moti­va­ted more by pre­con­cei­ved opi­ni­ons than by pro­fes­sio­nal inte­rest in the actu­al sub­ject of the book, the topic of money. In fact, the book is not a book on eco­no­mic histo­ry or mone­ta­ry histo­ry; Spang sim­ply lacks the rele­vant pro­fes­sio­nal exper­ti­se to place it in this category.

Is it a sci­en­ti­fic book at all? With the arbi­tra­r­i­ne­ss of its refe­ren­ces, the tech­ni­cal­ly incor­rect infor­ma­ti­on, and its love of well-sound­ing and see­min­gly pro­found wor­d­ing, the book, in my opi­ni­on, should rather be ran­ked in the cate­go­ry of “crea­ti­ve wri­ting” than in that of science. 

My opi­ni­on and the opi­ni­on of Spang’s peers

My opi­ni­on on Spang’s book is nega­ti­ve, and I have endea­vou­red to exp­lain the per­ti­nent rea­sons at length and in detail. Of cour­se, this rai­ses the inte­res­ting ques­ti­on of what the pro­fes­sio­nal uni­ver­si­ty cri­tics thought of her book at the time. I can­not say I did an exhaus­ti­ve search, but I did find six reviews strai­ght away, which, tog­e­ther with the review in the Times Litera­ry Sup­ple­ment men­tio­ned at the begin­ning, makes seven[29]. In the last few days I have been made awa­re of two fur­ther reviews[30]. The tenor of the nine reviews is most­ly posi­ti­ve (inclu­ding the one in the TLS), with one excep­ti­on, the review by Euge­ne White, a spe­cia­list in eco­no­mic histo­ry of the Anci­en Régime and the French Revo­lu­ti­on. His review is basi­cal­ly sca­thing, alt­hough well-man­ne­red, poli­te and objec­tively phra­sed. The other reviews are posi­ti­ve, but often no less stran­ge in the way they argue than Spang’s text its­elf, and I some­ti­mes got the impres­si­on that they move in the same par­al­lel uni­ver­se of stran­ge theo­ries and truths — one could also say “codes” — as the aut­hor. In fact, Rebec­ca Spang can­not be an iso­la­ted case at the uni­ver­si­ties of this world, and it is equal­ly clear that peop­le of the same kind stick tog­e­ther and also sup­port each other. Cri­ti­cism of col­leagues is rather frow­ned upon, and ins­tead of cri­ti­cis­ing anyo­ne, others perhaps pre­fer to keep silent and not wri­te nega­ti­ve reviews — after all, you always meet again in one or the other board or com­mit­tee. In the case of two reviews (Pierre Labar­din, but espe­cial­ly John Shov­lin), I actual­ly had the impres­si­on that the review­er had some reser­va­tions but had set hims­elf the task of fin­ding posi­ti­ve points and kee­ping the review in that tone. 

Am I going astray? But such con­si­de­ra­ti­ons necessa­ri­ly come to the mind of someo­ne from out­side uni­ver­si­ty and the aca­de­mic world who per­so­nal­ly has a nega­ti­ve opi­ni­on of a book and won­ders why his own reser­va­tions are not echoed in the aca­de­mic reviews. Who is right? For me, the case is clear.

Moreo­ver, I encoun­ter this form of aca­de­mic wri­ting and thin­king, of which Spang’s book is an exem­pla­ry case, in too many pla­ces not to see it as a signi­fi­cant phe­no­me­non of our time, and also as a pro­blem. I think that in the huma­nities depart­ments of many uni­ver­si­ties some peop­le cul­ti­va­te a style of thin­king that is not cent­red on intel­lec­tu­al disci­pli­ne, ana­ly­ti­cal cla­ri­ty and the search for truth, but on the desi­re for self-appre­cia­ti­on and for dif­fe­ren­tia­ti­on from the “non-edu­ca­ted”. This some­ti­mes reminds me of tho­se scho­lastic aut­hors who, in a united front against the non-edu­ca­ted lay peop­le, nur­tu­red and cul­ti­va­ted the obscu­ri­ty and dif­fi­cult com­pre­hen­si­bi­li­ty of their texts as a mark of dis­tinc­tion. It is par­ti­cu­lar­ly reg­rett­able and sad­de­ning that this kind of pre­ten­tious and con­vo­lu­t­ed scho­l­ar­ly obscu­ri­ty is nowa­days often found among aut­hors who tend to asso­cia­te them­sel­ves with the left. Why this ten­den­cy to distance oneself to the point of incom­pre­hen­si­on from the com­mon peop­le, for whom they usual­ly decla­re their sympathy? 

Be that as it may. In any case, the posi­ti­ve reviews of Spang’s book have not con­vin­ced me that my own objec­tions are null and void, on the contrary.

Now, one could sim­ply igno­re this kind of books. But they are too nume­rous for that and thus clog up the chan­nels of sci­en­ti­fic work. This kind of books repre­sent a dubio­us enrich­ment of the sci­en­ti­fic publi­ca­ti­ons that future stu­dents will have to deal with and read and cite, even if grud­gin­gly, in order to meet the requi­re­ments of a com­ple­te biblio­gra­phy on the sub­ject. Poor stu­dents! What a was­te of time that stands in the way of real under­stan­ding, which in its­elf requi­res a lot of time and effort. How much time lost without any gain in knowledge!

Paul Huber, Decem­ber 2023

[1] Review by Patri­ce Higon­net in the Times Litera­ry Sup­ple­ment, June 12, 2015, p. 27, under the hea­ding «Com­mer­ce and eco­no­mic indi­vi­dua­lism in the French Revolution”.

[2] See my arti­cle «Bank­rott», publis­hed in the maga­zi­ne «NZZ Geschich­te», No. 43, Zurich, Decem­ber 2022, pp. 24–39 (the cover page tit­le was: «Revo­lu­ti­on – Stürz­te 1789 ein Staats­bank­rott Frank­reichs Mon­ar­chie?»; in Eng­lish: “Revo­lu­ti­on — Did a sta­te bankrupt­cy topp­le the French mon­ar­chy in 1789?”). No Eng­lish trans­la­ti­on available. 

[3] Wil­liam Doyle: Ori­gins of the French Revo­lu­ti­on, Oxford Uni­ver­si­ty Press, 1980.

[4] For examp­le, the book, quo­ted by Spang, writ­ten by Phil­ip T. Hoff­man, Gil­les Postel-Vinay, and Jean-Laurent Rosen­thal: Pri­celess Mar­kets: The Poli­ti­cal Eco­no­my of Credit in Paris, 1660–1870. Uni­ver­si­ty of Chi­ca­go Press, 2000 (see the table on p. 100). The book has initi­al­ly been publis­hed in French under the tit­le: Des mar­chés sans prix: Une éco­no­mie poli­tique du cré­dit à Paris, 1660–1870; Édi­ti­ons de l’EHESS. Paris, 2001 (the­re, the same table can be found on p. 130). 

[5] An excel­lent over­view of the dif­fe­rent types of short- and long-term debt in the Anci­en Régime is given, for examp­le, by Euge­ne N. White in his arti­cle «Was The­re a Solu­ti­on to the Anci­en Regime’s Finan­cial Dilem­ma?» (in: The Jour­nal of Eco­no­mic Histo­ry, Sept. 1989, Vol. 49, No. 3, pp. 545–568):

«When faced with a defi­cit, the Crown issued a varie­ty of debt instru­ments. Long-term secu­ri­ties inclu­ded the ren­tes per­pé­tu­el­les or con­sols, the ren­tes via­gè­res or life annui­ties, loans hypo­the­ca­ted on the reve­nues of the pays d’é­tats and the city of Paris, the tax far­mers’ secu­ri­ty bonds, and loans from the cler­gy. Most of the government’s short-term debt took the form of tax anti­ci­pa­ti­ons — assi­gna­ti­ons, bil­lets de fer­mes, or rescrip­ti­ons. The government’s debts also inclu­ded the det­tes exi­gi­bles arriè­rées — a hete­ro­ge­ne­ous group of non-inte­rest-bea­ring pro­mis­so­ry notes.» (p. 546)

[6] Tho­mas J. Sar­gent and Fran­çois Vel­de: The Big Pro­blem of Small Chan­ge, Prince­ton Uni­ver­si­ty Press, 2002. Tho­mas Sar­gent, by the way, is a Nobel lau­rea­te in Eco­no­mics (2011). 

[7] ibid., p. 52 and passim

[8] Ange­la Redish: Bime­tal­lism: An Eco­no­mic and His­to­ri­cal Ana­ly­sis; Cam­bridge Uni­ver­si­ty Press, 2000. p. 133.

[9] Ange­la Redish, ibid., p. 131. We will not go into the tech­ni­cal explana­ti­on of the “mint equi­va­lent” of 36 ver­sus 27 liv­res tour­nois here; for this as well as for the other tech­ni­cal details the rea­der is refer­red to Ange­la Redish’s book itself. 

[10] Sargent/Velde, op.cit., p. 232

[11] ibid.

[12] ibid., p. 230ff., Chap­ter “Infla­ti­on in Spain”. 

[13] The tit­le of the book goes back to an expres­si­on from the gre­at eco­no­mic his­to­ri­an Car­lo Cipol­la. Accord­ing to him in the late Midd­le Ages and ear­ly modern peri­od the pro­blems asso­cia­ted with the pro­vi­si­on of low deno­mi­na­ti­on coins were intri­ca­te for cen­tu­ries, which is why he refer­red to them as “the big pro­blem of the pet­ty coins” or “the big pro­blem of small chan­ge” (see in: Car­lo Cipol­la: Money, Pri­ces, and Civi­liz­a­ti­on in the Medi­ter­ra­ne­an World, Fifth to Seven­te­enth Cen­tu­ry; Prince­ton Uni­ver­si­ty Press, 1956. Reprint: New York: Gor­di­an Press, 1967, pp. 27ff.). Sargent/Velde com­ple­ment Cipolla’s fin­dings with addi­tio­nal examp­les and trans­po­se them into a sys­te­ma­tic eco­no­mic model. 

[14] Cipol­la 1956, op.cit., p. 27

[15] See also the afo­re­men­tio­ned arti­cle: Paul Huber, op.cit. 

[16] The term «com­mo­di­ty money» is usual­ly trans­la­ted as «Waren­geld» in Ger­man. Diver­se are the mate­ri­als and objects, as well as living bein­gs (humans and ani­mals), which were used in histo­ry as com­mo­di­ty money (and thus as a mea­su­re of value and unit of account). The examp­les of living bein­gs inclu­de cows, sheep, hor­ses, but also slaves. The examp­les of mate­ri­als ran­ge from Baby­lo­ni­an grain units to gold and sil­ver, from pep­per­corns to cowrie shells, and so on and so forth. 

[17] Marc Bloch: Esquis­se d’une his­toire moné­taire de l’Europe, Cahiers des Anna­les, No. 9, Paris, 1954. p. 9. 

[18] Ange­la Redish, op.cit. The chap­ter «The mecha­nics of com­mo­di­ty money» can be found on pp. 13–40.

[19] 45 bil­li­on liv­res is the com­mon­ly quo­ted figu­re for the value of the assi­gnats issued. Chris­ti­an Aubin makes an esti­ma­te of the assi­gnats taken back by the sta­te and effec­tively with­drawn from cir­cu­la­ti­on and arri­ves at an esti­ma­ted value of actual­ly cir­cu­la­ting assi­gnats of 34.5 bil­li­on liv­res for Febru­a­ry 1796. See: Chris­ti­an Aubin: «Les assi­gnats sous la Révo­lu­ti­on fran­çai­se: un exemp­le d’hy­per­in­fla­ti­on”; Revue éco­no­mi­que, Jul., 1991, Vol. 42, No. 4, Sci­en­ces Po Uni­ver­si­ty Press, Paris, pp. 745–761. See the table on p. 760. 

[20] see Aubin, op.cit., p. 760.

[21] Jérô­me Blanc: “La com­ple­xi­té moné­taire en Fran­ce sous l’An­ci­en Régime : éten­due et modes de ges­ti­on,” publis­hed in: De Pecu­nia, 1994, VI (3), pp.81–111. (Post-Print halshs-00090030).

[22] A small detail of local histo­ry rela­ted to my home­town of Basel: One of the inves­tors who got out in time, the Swiss Jean Deu­cher, used his pro­fits to buy the moated cast­le in Bot­t­min­gen out­side Basel, along with other pro­per­ties in the regi­on, and remo­de­led it lavish­ly in the style of his time. See in: Her­bert Lüt­hy: Les Mis­sis­si­pi­ens de Steck­born et la for­tu­ne des barons d’Holbach; in: Schwei­zer Bei­trä­ge zur All­ge­mei­nen Geschich­te, Vol. 13, 1955 (pp. 143–163). p. 154. 

[23] See foot­no­te 5. The “assi­gna­ti­ons” men­tio­ned here have not­hing to do with the paper cur­ren­cy of the later assi­gnats, except the com­mon root word in the name. 

[24] An excel­lent descrip­ti­on of this sys­tem of tax far­mers can be found in the book by John F. Bosher:French Finan­ces 1770–1795 — From Busi­ness to Bureau­cra­cy, Cam­bridge Uni­ver­si­ty Press, 1970.

[25] On the tax sys­tem and the con­nec­tion bet­ween the finan­cial and debt cri­sis of the Anci­en Régime and the Revo­lu­ti­on, see my arti­cle men­tio­ned ear­lier: Paul Huber, op.cit.

[26] See foot­no­te 5. 

[27] See foot­no­te 6.

[28] Pierre Joseph Cam­bon was the de fac­to finan­ce minis­ter of the revo­lu­tio­na­ry government from 1793 to 1795, without bea­ring the expli­cit tit­le. In 1793 he had been elec­ted to the Com­mit­tee of Public Safety. 

[29] The reviews found are by Nico­las Dela­lan­de, Micha­el Kwass, Pierre Labar­din, Maria Paga­nel­li, John Shov­lin, Euge­ne White — all writ­ten in Eng­lish, except for Delalande’s:

  • Nico­las Dela­lan­de: Revue d’his­toire du XIXe siè­cle [online], Vol. 52, 2016, pp. 1–3
  • Micha­el Kwass: The Eng­lish His­to­ri­cal Review, Volu­me 132, Issue 554, Febru­a­ry 2017, p. 158
  • Pierre Labar­din: Accoun­ting Histo­ry 2019, Vol. 24 (1), p. 158
  • Maria Paga­nel­li: Jour­nal of the Histo­ry of Eco­no­mic Thought, Volu­me 41, Issue 3, Sep­tem­ber 2019, p. 461
  • John Shov­lin: The Jour­nal of Modern Histo­ry, Volu­me 88, Num­ber 4, p. 945
  • Euge­ne White: The Jour­nal of Eco­no­mic Histo­ry, Volu­me 76, Issue 1, March 2016, p. 244

[30] Writ­ten by Tho­mas E. Kai­ser and Jack R. Cen­ser, both in English:

  • Tho­mas E. Kai­ser: The Ame­ri­can His­to­ri­cal Review, Vol. 121, No. 1 (Febru­a­ry 2016), pp. 191–194
  • Jack R. Cen­ser: Jour­nal of Social Histo­ry, Vol. 49, No. 4 (Sum­mer 2016), pp. 999‑1003

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