ABSTRACT
Among nineteenth-century classical economists, only David Ricardo (1772-1823) and Henry Thornton (1760-1815) rival Thomas Tooke (1774-1858) for influence on the development of monetary economics. The large-scale empirical analysis contained in Tooke and Newmarch’s monumental six volume History of Prices (1838-1857) has clearly been an invaluable source for economists as well as economic historians.1 But it is Tooke’s novel banking school ideas, which were most coherently presented in his classic pamphlet, An Inquiry into the Currency Principle (1844), that have enjoyed a lasting influence on monetary thought. In broad terms, Tooke’s influence was exerted on the development of monetary economics in two different theoretical traditions. Firstly, Tooke’s banking school ideas had a constructive influence on the development of monetary thought in the classical tradition. In the nineteenth century this line of influence ran through fellow members of the Banking School, from John Fullarton and James Wilson, to J.S.Mill and to Marx. The rehabilitation of the classical approach in the second half of the twentieth century, principally as a result of the work of Sraffa (1951; 1960), has revived this line of influence. Secondly, Tooke’s banking school criticisms of the classical economists’ quantity theory exerted an important influence on the reconstruction of the quantity approach to money in the marginalist tradition. In this tradition Wicksell and Marshall stand out as the two most important progenitors of twentieth century monetary thought.2 In particular, Tooke’s contributions significantly assisted Wicksell and, to a lesser extent, Marshall, in developing their seminal monetary theories within the framework of the then newly founded marginal analysis. Apart from these two broad lines of influence, Tooke’s banking school ideas had a more general impact on monetary policy debates in Britain, Continental Europe and the United States of America.3
