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← Fiat Money Inflation in France

Fiat Money Inflation in France — Outline

Thesis

“Such, briefly sketched in its leading features, is the history of the most skillful, vigorous and persistent attempt ever made to substitute for natural laws in finance the ability of legislative bodies, and, for a standard of value recognized throughout the world, a national standard devised by theorists and manipulated by schemers.”

III.

Development

  1. 1.

    Introductory: origins and purpose of the work

    “it never occurred, either to my Michigan students or to myself, that it could ever have any bearing on our own country.”

    INTRODUCTION
  2. 2.

    First movement: historical precedent — the lessons of John Law's experiment

    “how it breaks down thrift and develops political and social immorality.”

    I.
  3. 3.

    Second movement: the initial issuance — the April 1790 decree

    “In April, 1790, came the final decree to issue four hundred millions of livres in paper money, based upon confiscated property of the Church for its security.”

    I.
  4. 4.

    Third move: Mirabeau's speech and the second great issue

    “nothing could resist the eloquence of Mirabeau.”

    I.
  5. 5.

    Fourth move: accelerating issues and the law of depreciation

    “in issues of irredeemable currency, in obedience to the theories of a legislative body or of the people at large, there is a natural law of rapidly increasing emission and depreciation.”

    I.
  6. 6.

    Fifth move: social and moral corruption from inflation

    “With the plethora of paper currency in 1791 appeared the first evidences of that cancerous disease which always follows large issues of irredeemable currency”

    I.
  7. 7.

    Sixth move: the debtor class, the Maximum, and the Forced Loan

    “there appeared, as another outgrowth of this disease, what has always been seen under similar circumstances.”

    II.
  8. 8.

    Seventh move: collapse of the assignats and ruin of the working classes

    “Before the end of the year 1795 the paper money was almost exclusively in the hands of the working classes, employees and men of small means”

    II.
  9. 9.

    Eighth move: the mandats and the final end of paper money

    “Never were great expectations more cruelly disappointed.”

    III.
  10. 10.

    Ninth move: logical summary of economic and moral consequences

    “Just as dependent on the law of cause and effect was the moral development.”

    III.
  11. 11.

    Tenth move: Bonaparte's specie-basis policy as counter-example

    “While I live I will never resort to irredeemable paper.”

    III.

Conclusion

“There is a lesson in all this which it behooves every thinking man to ponder.”

III.