Abstract
The suspension of specie payments in 1797 initiated a debate between bullionists like Ricardo who believed that irresponsible money creation had led to inflation and anti-bullionists like Bosanquet who felt that prudent lending backed up by ‘real bills’ as good collateral would ensure that the money supply even in the absence of gold and silver would not be in excess. Malthus, who never wrote a dedicated tract on money, leaves no doubt that he is a bullionist, convinced that the supply of money was causing the price of goods to go up. He was critical of the bankers and what he saw as their vested interest to make interest-bearing loans. He felt that a return to specie would end competitive devaluation by establishing a world economy linked up by fixed exchange rates and price adjustment. Inflation is always bad. It does, however, create finance for industry through the redistribution of purchasing power known as forced saving.
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References
By T. R. Malthus
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Reisman, D. (2018). Money. In: Thomas Robert Malthus . Great Thinkers in Economics. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-01956-3_12
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