Auden made further comment upon economic matters, in his “Makers of
History”.  He wrote: 

“Serious historians study coins and weapons”

A minority view perhaps, but one I share.  I hope list members will forgive
me if I use this comment as a pretext to ask a question to do with the study
of historical coinage systems, which is rather important in my own current
researches.  I would be delighted to get any thoughts, on or off group.

The comment is a very profound criticism of the historical discipline,
perhaps more profound than Auden himself realised when he wrote it.

It seems to me that anyone who studies the role of “small change” within a
money transmission system should quickly be able to see that the supposed
great critics of capitalism within the 20th century historical canon
sometimes completely missed their mark.

I am thinking for instance of Christopher Hill’s attempt to characterise the
monetary influence of the Bank of England in the early eighteenth century,
or Fernand Braudel’s crack at unravelling Akbar’s monetary system, or that
of Sung China.

But it also seems to me that economists have perhaps failed ever more
comprehensively in the 21st century over the same matter.  I am thinking of
the recent volume by Sargent and Velde:  “The Big Problem of Small Change”.
 This book has received negative comment from monetary historians (Munro,
Kuroda) and from economists (Wallace, Yeager).  But as far as I have
discovered, no one seems to have taken the bull by the horns and suggested
that the explanation offered by Sargent and Velde is simply incorrect at the
most fundamental level.

In every historical case I have looked into, the failure of issuance of
small change by official mints seems to involve petitioning from established
merchants who would likely gain significantly from pushing the greater part
of the general public into credit or trucking type payment systems, with the
accompanying price opacity, super normal profits, etc.  To put it bluntly,
the historical failure of small change issuance usually looks a lot like a
conspiracy of government and big business against the general public.  A
matter Sargent and Velde do not broach.

I have enquired into this matter in a lazy sort of way for about 30 years,
and it occurred to me quite recently that I have only ever come across one
writer, Maria Graham, who went beyond hints and spelled the matter out
unambiguously.  

I append her text, and ask a question.  Can anyone cite another author,
apart from the feisty Mrs Graham, who has clearly made this point?

Rob Tye, York, UK

The contribution is to be found in her "Journal of a residence in Chile,
during the year 1822. And a voyage from Chile to Brazil in 1823" around
pages 219-220:

She wrote:

"The greater part of the coin still current in Chile is of rough pieces of
silver, weighed and cut in any shape, and struck with the hammer, and far
ruder than any I had seen before. …….. I understand government has it in
contemplation to issue a coinage of low value, which will be of  great
advantage to the people. I have often been struck with the  inconvenience of
the want of small coin here. There is nothing in circulation under the value
of a quartillo, or quarter of a real, which, if the dollar be worth four
shillings and sixpence, is more than three half-pence ; and quartillos are
not coined here, and are so scarce, that I have only seen three since April
: consequently we may call the smallest common coin the medio, or near
threepence halfpenny; a sum for which, at the price of bread and beef here,
a whole family may be fed. What then is the single labourer to do ? This
evil, great as it is, has occasioned a greater. In order to accommodate
purchasers with a quantity under the value of a medio, or quartillo, the
owners of pulperias (a kind of huckster's shops) give in exchange for
dollars or reals promissory notes : but these notes, even where the article
bought is half a dollar, and the note for half, the pulperia man will not
discount in cash, but in goods ; so that he makes sure of the poor man's
whole coin, besides the chance that a peasant, who does not read or write,
may lose or destroy the note itself. Many and rapid fortunes have been made
by these notes, and the loss to the poor has amounted to more than any one
of the government direct taxes. This has not been overlooked by some of the
great merchants connected with the minister here; and a number of retail
shops have been set up at their expense, though under the names of inferior
agents. And this is probably one of the reasons for the delay of the very
necessary coinage of small money."