chapter  54
3 Pages

THE HISTORICAL CHANGES IN THE VALUE OF MONEY AND THE DISAPPEARANCE OF NATURAL ECONOMY

The instruments of theory will never enable us to ascertain the extent to which the increased production of precious metals after the discovery of America had a share in the depreciation of money which has since taken place. To answer this question economic history should again examine the evidence and determine whether the quantitative theory offers sufficient explanation. There are inconsistencies between the dates of the beginning and end of this process and those which measure the period of the influx of the precious metals. Since Bodin, the quantitative theory has been used exclusively in the dominant explanation of this great phenomenon. It is not particularly in the convincing power of the proofs offered that the reason for the prevalence of this theory is to be sought. The reason lies rather in the fact that much as the quantitative theory has been disputed, it has never yet been supplemented, much less displaced by any other theory which admits of a wholly satisfactory explanation. Nevertheless, a consideration of the economic development of Europe which has taken place since the beginning of the discoveries, leads up to an idea of this kind. There is a temporal parallelism which suggests some sort of causal connection between the two processes of the depreciation of money and the disappearance of the rural natural economy as it was absorbed into the monetary economy.