Monetary Theory and Cameralist Economic Management c.1500-1900A.D.

More than England and other states the German principalities were, in the preindustrial period, hampered by silver outflow and persistent pressures on the balance of payments which led to idiosyncratic models and strategies of economic development usually but not entirely helpfully called “Cameralism”. It is less well understood how Cameralism as a policy of order and development and monetary theory went together. The present paper will attempt a sketch of these working mechanisms as well as provide a few angles for new perspectives and future research. A first section after the brief introduction studies general issues of development in relation to balance of payment constraints (II), followed by the discourses on whether the domestic currency ought to remain stable in terms of intrinsic (silver) value (III), or whether it may be debased so as to raise domestic exports and competitiveness (IV). Both options were considered, at times and by varying actors, as valid strategies of promoting economic development, especially export-led growth, although most contemporaries viewed coin debasement as harmful to the economy. A fifth section discusses an alternative to the aforementioned strategies, by raising effective monetary mass through increasing velocity. Since the middle ages and into the nineteenth century the German economic tradition had a clear understanding of how velocity could be managed and the common weal stimulated by an increase in “vivacity” of circulation (V). Upon hindsight it appears that we find here a powerful programme towards promoting economic development and Europe’s rise towards capitalism. A conclusion will offer some thoughts for further research (VI).