[andrew.esselbach]

What was Adam Smith’s view on monetary theory, and how did he explain the effects of monetary inflation on the exchange value of the currency?

[bob.murphy.ancap]

Smith referred to the habit of rulers to debase their coinage, e.g. see

https://www.cato.org/policy-report/julyaugust-2011/deficits-debt-debasement

and

https://fee.org/articles/inflation-money-and-freedom/

But Smith also famously thought the precious metals were “wasteful” in the sense that you had to devote real resources into their production as coins.

[bigqueue_qlewis]

You don’t “need” to spend the resources to give value to the metals…..the work / cost of making them into coins was a sort cost of “insurance / simplifier” that made them more “reliable”…..the coins were more “difficult” to replicate (so less likely to be fake material) and as coins that them more reliably reflect a specific weight (value) of metal……so to me the coining was not required except to make use easier and more reliable.

You could very well offered up to everyone a small chemistry set for material purity testing and an accurate triple beam balance…..but I suspect that no have done the job quite as well.

I might have to read his reasons just for kicks…..he is the type of guy who has been seen crushing high school drop-outs in debates.

[bob.murphy.ancap]

OK I probably misled you in my choice of words… It wasn’t just the use of resources in coinage per se, but also extracting the metals (gold and silver) in the first place.

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