ABSTRACT
This chapter argues that the contrast between ‘commodity’ and ‘fiat’ money has been exaggerated. In England, the right of government to determine the value of money is apparent from before the Conquest. The principle of nominalism, long established in England and certainly adopted elsewhere from the later middle ages, should remind that coins commonly passed domestically at a face value only loosely connected to their intrinsic content. Peng X. argues that the opium trade reduced the quantity of silver sent to China after the end of the eighteenth century, and in the nineteenth century, English merchants began to export silver from China. The chapter shows that bullion-based money was no more immune to monetary problems than fiat money. The English coinage in the late-seventeenth and eighteenth centuries demonstrates how far the silver currency might drift from its theoretical intrinsic value while remaining in circulation at its face value.
