Colonial Script ...
Sun, 22 Sep 2002 15:32:34 -0700
Oh, they were plenty upset about the tea taxes.
But the crack down on colonial script certainly screwed over the
American Colonies. And, BTW, England as well.
Dear Ben Franklin was right for the wrong reasons. First of all the
colonies were not prosperous compared to England proper. Second, the
issuance of colonial script had nothing to do with full employeement.
(In fact, it is almost inconceivable he would make that claim. It
sounds like a modern Keynsian was creating an urban legend.)
OTOH the lack of sufficient circulating monetary instruments was
economically crippling. Imagine trying to buy your supplies by offering
IOUs on your own name -- and then trying to market / exchange the paper
as the merchant who took the IOU.
The most common problem in the world is when a government prints too
much money. The effects are a complete disaster. There are a lot of
incentives that push governments into doing this even though it is
So almost all the literature talks about that.
But you can ALSO screw an economy over by taking all the money out of
circulation. The fundamental cause of the American Great Depression was
exactly this, courtesy of the Federal Reserve Board.
I don't think shifting the power to print money to the bank of Canada
had much effect. And Canada is still a prosperous country.
> -----Original Message-----
> From: email@example.com [mailto:firstname.lastname@example.org] On Behalf Of
> Lawrence Murphy
> Sent: Saturday, September 21, 2002 7:31 AM
> To: Mr. FoRK
> Cc: email@example.com
> Subject: Re: sed /s/United States/Roman Empire/g
> >>>>> "f" == fork list <Mr.> writes:
> f> "Free trade and free markets have proven their ability to lift
> f> whole societies out of poverty" I'm not a
> f> socio-political/history buff - does anybody have some clear
> f> examples?
> China? Ooops, no wait, scratch that.
> There is one counter example that I can think of, but it may not be
> precisely "free trade/markets" -- when Ben Franklin first visited
> England he was asked why the colonies were so prosperous. Ben
> explained that they used "Colonial Script", a kind of barter-dollar,
> and increasing the supply of script ensured complete employment. The
> British bankers were furious and immediately lobbied parliament to
> clamp down on the practice. Within a few years, the colonies were
> rife with unemployment and poverty just like the rest of the Empire.
> According to questionable literature handed out by a fringe political
> party here in Canada, the Founding Fathers had no real complaint about
> tea taxes, it was the banning of colonial script they were
> protesting. If this is true, then it comes right back to the forces
> that killed Ned Ludd's followers as to why popular opinion believes
> they were protesting a tea tax. The same pamphlet claimed that Canada
> was also a prosperous nation until, by an act of parliament in the
> late-50's or early 60's, the right to print money was removed from the
> juristiction of parliament and handed over to the Bank of Canada.
> I've wondered about all this. Certainly the timeline of the collapse
> of the Canadian economy fits the profile, but there are oodles of
> other causes (for example, spending money like we had 300M people when
> we only had 20M) Anyone have any further information on this?
> Gary Lawrence Murphy - firstname.lastname@example.org - TeleDynamics Communications
> - blog: http://www.auracom.com/~teledyn - biz: http://teledyn.com/ -
> "Computers are useless. They can only give you answers." (Picasso)