Riccardo Faucci

The Theory of Imaginary Money from Charlemagne to the French Revolution

If one reads the books on monetary subjects that were written in the period from the sixteenth to the eighteenth century, one frequently encounters the concept of ‘imaginary money’. Other terms used are ‘ideal money’, ‘political money’, moneta numeraria, ‘money of account’. What these terms meant was not very clear even to contemporaries. The most authoritative writer among the historians of French monetary vicissitudes, Francois Le Blanc, resigned himself to defining as imaginary any kind of money which, ‘properly speaking, is but a collective term comprising a certain number of real moneys’. The imaginary money which almost everywhere was called ‘pound’ or an equivalent term such as ‘livre’, ‘lira’, ‘pond’, was, in Le Blanc’s words, ‘never changing in value; in fact, we have used it since the time of Charlemagne, and it has always been worth 20 sous (shillings), and each sou, 12 deniers (pence)’.1 It is called ‘imaginary’ because of the fact that it has never been coined; ‘because we have never had a real specie which has consistently been worth 20 sous or one worth 12 deniers’. Although from time immemorial men have neither seen nor touched any imaginary money, nevertheless, in the remote past it was something real, ‘since if we go back to the time when in France people began to count in pounds, shillings, and pence, we shall find that these imaginary moneys owe their origin to a real thing’.

Are there too many Banks in Italy

The report of the Governor of the Bank of Italy for 1929 contains interesting information about the number and mortality of Italian banks. At the end of 1927 there were 4,405 in operation; the number fell to 4,197 at the end of 1928 and 4,097 on 28 February 1930, with a decrease of 208 in 1928 and 118 in 1929 and the first two months of 1930. In reality the reduction was even larger since in the first two years of application of Decrees 1511/1926 and 1830/1926, which established a form of government supervision of banks and entrusted it to the Bank of Italy, many institutions were not caught by the Bank’s survey and did not register with the Ministry of Finance.

Banks with Adjectives

Some combinations of words, as soon as they are uttered, immediately make one think they were put together by artifice: the words scowl at each other and ill tolerate one another. So it is with the combination ‘fascist bank’, which was pronounced not long ago as if it were an innovation of the utmost urgency in Italy’s existing economic and political landscape.

Abstract Hypotheses and Historical Hypotheses and on Value Judgements in Economic Science

The author studies the differences between abstract hypotheses and uniformities and empirical-historical uniformities in the field of economic science, distinguishing those that are valid sub specie aeternitatis but within the limits of the premises that have been established, from those which cannot be extended, except with great caution, beyond the time and place considered. Do the models of the different types of state proposed by economists for the study of financial affairs belong to the category of abstract or historical tools of investigation? The concept of a state which, in pursuit of its own ends, focuses only on the individual or only the collective community, is logically incoherent. And finally, the economist’s decision to refrain from value judgements, which is legitimate if motivated by the scientific division of labour, but illogical from the perspective of the more general quest for truth.

Myths and Paradoxes of Justice in Taxation

For a long time I was uncertain as to the most appropriate title for this essay. It would not have been completely out of place to entitle it: ‘In defence of the state against the doctrinaires’, since it is common knowledge worldwide that the confraternity of the doctrinaires is becoming the enemy number one of public finance. Public administrators — ministers of finance or directors of the great revenue services — who are in charge of the finances of contemporary states find themselves having to strenuously defend the systems currently in force against the reforming mania of the doctrinaires, and even though these systems do actually function and yield a revenue of billions, the doctrinaires seek to ensure justice; what is more, they are not content with simple rough-hewn justice — which is the only concretely possible version — but instead they desire perfect justice, which is complicated and destroys ten in order to collect one.

Fra storia ed economia: riflessioni sulla storia del pensiero economico in Italia

An unfailing element in the Italian tradition of economics is a deep concern with its past. However, motivations have been different through time. Neoclassical economists, such as Pantaleoni and Einaudi, approached the past in order to demonstrate the eternity of the «economic dogma». This absolutist stance probably explains the undisputable retardation of interest towards the history of economic thought during the heyday of Keynesianism in Italy, that in fact brought to the eclipse of this «dogma». On his part, after 1960, Sraffa had the merit of prompting a renewed interest in classical and Marxian economics, but this was not sufficient to relaunching historical work in Italy. Nowadays, when we assist to a new wave of research in the history of economics, a stronger collaboration between historians and economists is not only desirable but feasible, if based on methodological pluralism, mutual respect and a fruitful interchange of ideas and knowledge. Some cases in which this collaboration has already given excellent results are conclusively indicated.

Economic Liberalism and Political Liberalism

In current language, used above all in the writings of laymen, what is held to be ‘economic liberalism’ is instead a purely abstract manner of reasoning characteristic of economic science by virtue of its being science and hence abstraction. If the economist writes, ‘Let us suppose that the contracting parties act in a free market in which there is competition between many sellers and between many buyers’, laymen believe that because the economist has adopted such a premise he is ‘also’ an economic liberal in practice. But the economist also adopts different premises, as when he writes, ‘Let us suppose that in the free market there is only one seller and there are many buyers’; or when he postulates ‘Let us suppose that in a market with a single buyer and many sellers the market is not free but regulated by the state according to the criterion, say, of the maximum collective utility.’ In the first case, the reasoner starts out from the ‘premise’ of free competition; in the second, from that of pure private monopoly; in the third, from that of public monopoly. The reasoner may believe in economic liberalism or communism or some other faith. We know nothing of this in the sphere of scientific reasoning, where the only thing that matters is to pose appropriate premises for rigorous, abstract reasoning and to draw all the inferences they contain. The premise of the free market or of self-seeking individual agents is not an ‘economic’ principle; it is a pure tool of reasoning and has an exclusively abstract value.

His Place in Economic Thought

Faucci brings up many problems related to the general interpretation of the development of Italian economic thought. The idea of De Viti de Marco’s fiscal federalism is one focus of interest, as well as his conception of democracy. Faucci shows why in the Italian school of Public Finance, De Viti de Marco was the “absolute protagonist”. He also introduces the theme of the “scientific sources” of the Italian economist. He believes there should be further study on the question of De Viti de Marco’s marginalism, versus his “classicism”.

What did Cantillon Say

The occasion of the second centenary of its first edition (1755) is marked by the publication of the second Italian version of a book regarded as one of the milestones of economic science. The first translation, published in 1767 in Venice by Scottoni and attributed to ‘an English author’, became widely known among Italian economists and continued to circulate up to the beginning of the nineteenth century, whereafter it fell into oblivion.

On the Theory of Public Works in Malthus and on the Type of His Prophecies

John Maynard Keynes — Essays in Bibliography. (A book with pages numbered from x-318, Macmillan & Co., St Martin’s Street, London, 1933. Price 7 shillings 6 d.).