• R. B. Outhwaite
Part of the Studies in Economic History book series


THE argument about the causes of inflation is largely about whether money should be assigned an active or a passive role. On the whole the monetary school have argued that its role was an active one, that monetary changes caused the price rise.2 The real school, however, have relegated monetary factors to a passive role, arguing that the. inflation was caused principally by divergences in the population-resource balance which inflated agricultural prices, wages and costs. The view adopted here is that over the period as a whole ‘real’ factors, and especially the growing imbalance between the growth of population and agricultural output, offer the more satisfactory general explanation of inflation,1 but that its pace may have been exacerbated in England in the 1540s and early ’50s by the great debasement. Even if the emphasis is placed in this way, it must still be acknowledged that increases in the money supply and/or increasing efficiency of its use, were necessary concomitants of the whole process.2 In other words, using Fisher’s shorthand, that increases in MV were necessary concomitants of increases in PT. Despite all the objections previously raised, no one can seriously deny that a considerable increase in PT took place. The total output of the economy in 1640 can hardly have been less than it was in 1500, and was probably considerably greater.


Precious Metal Money Supply Sixteenth Century Passive Role Gold Coin 


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  1. 1.
    These are retailed in H. A. Miskimin, ‘Monetary Movements and Market Structure — Forces for Contraction in Fourteenth and Fifteenth Century England’, Journal of Economic History, XXIV (1964), 470–490; see also R. D. Ware’s discussion of this paper (pp. 491–5).Google Scholar
  2. 2.
    The best recent discussion is C. M. Cipolla, ‘Currency Depreciation in Medieval Europe’, Economic History Review, 2nd series, XV (1963), 413–22.CrossRefGoogle Scholar
  3. 5.
    A fascinating discussion of this silver famine, which was European in its incidence, is to be found in the important article by A. M. Watson, ‘Back to Gold — and Silver’, Economic History Review, 2nd series, XX (1967), 1–58. He shows how in the early Middle Ages Europe experienced shortages of gold but an abundance of silver, while the Muslim world enjoyed plenty of gold but little silver, how also this position was reversed from the mid-thirteenth century, and how these various experiences were closely interrelated.Google Scholar
  4. 1.
    R. B. Outhwaite, ‘The Trials of Foreign Borrowing: The English Crown and the Antwerp Money Market in the Mid-Sixteenth Century’, Economic History Review, 2nd series, XIX (1966), 289–305.CrossRefGoogle Scholar
  5. 2.
    Including capital gains derived from privateering. The return from Drake’s expedition of 1577–80 was estimated at a million and a half sterling, of which perhaps £600,000 was in specie: W. R. Scott, The Constitution and Finance of English, Scottish and Irish Joint-Stock Companies to 1720 (3 vols., Cambridge, 1912), I, 78–85. Although this was probably the most spectacularly successful of such ventures, unsuccessful ones did not represent a very considerable external loss since most payments were made in England, for outfitting, provisioning, etc., before sailing, and rewards, if any, were distributed on return. Purchases from foreigners would thus be very small.Google Scholar
  6. 1.
    Merchants would find it difficult to sell imported goods for which any English substitutes existed, and would find it easier to export goods from England, since in both cases the prices of native goods rose much more slowly than the external value of the currency. The process is admirably explained in B. E. Supple, Commercial Crisis and Change in England, 1600–1642 (Cambridge, 1959 ), pp. 73–5.Google Scholar
  7. 3.
    Cunningham, The Growth of English Industry and Commerce (Cambridge, 5th ed., 1922), I, 137–9.Google Scholar

Copyright information

© The Economic History Society 1969

Authors and Affiliations

  • R. B. Outhwaite
    • 1
  1. 1.University of LeicesterUK

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