How Private Money Ended a Financial Crisis: News Releases: The Independent Institute

The Power of Independent Thinking


Stay Connected
Get the latest updates straight to your inbox.

News Release
August 6, 2008

How Private Money Ended a Financial Crisis
A New Book from Economist George Selgin

“ . . . how private enterprise solved a monetary problem . . . a splendid piece of historical analysis.”
Milton Friedman, Nobel Prize winner in Economics

OAKLAND, Calif., August 6, 2008—“Bad money drives out the good.” With the strength of the U.S. dollar steadily decreasing and its status as the reserve standard growing less secure, the centuries-old principle of Gresham’s Law—currency of a lesser value forces currency of a higher value out of circulation—has once again become topical. A look through monetary history can provide a new context for considering the roots of private mints and their influence on government-issued currency. The new book by Independent Institute Research Fellow and West Virginia University professor George Selgin compels readers to examine “existing government-controlled monetary systems” and the “advantages, as well as the true shortcomings, of less top-heavy alternatives.”

In Good Money: Birmingham Button Makers, the Royal Mint, and the Beginning of Modern Coinage, 1775-1821 (August 15, 2008 / University of Michigan Press in association with The Independent Institute / $40.00), Selgin uncovers a vital piece of economic history—the dramatic story of Great Britain’s private coinage episode. Opening with “Copper King” Thomas Williams’s initial challenge to the Royal Mint’s monopoly, he follows with “Lunar Man” Matthew Boulton’s construction of the world’s biggest and most technologically sophisticated mint. Good Money then delves into the fascinating heyday of commercial coining in the 1790s, during which time official coins saw a steep drop in popularity.

The story continues with the much-coveted regal coinage contract landed by Boulton in 1797 and concludes with an overview of a new round of private coinage that began in 1811 and the British government's highly unpopular decision to restore the Royal Mint's coinage monopoly. In his epilogue, Selgin returns to the present-day Birmingham Mint, which remained in operation through 2003, a powerful example of the strength of free enterprise.

True to his scholarly background, the author shatters many myths, including the idea that Boulton became involved in coinage for strictly altruistic reasons as well as the myth that his steam-powered presses were uniquely capable of making counterfeit-proof coins. By doing so he reveals the genuine reasons behind the private sector’s success in solving currency problems that had long stumped the British government, while showing how private-sector innovations inspired and shaped official coinage reforms.

Good Money has something to offer both experts and amateurs in a wide range of fields. Historians will find an authoritative account of monetary developments during the Industrial Revolution, while economists will discover grounds for revising their beliefs surrounding the theory of coinage and money more broadly. Numismatists and amateur coin collectors will learn the full story behind the coins they’ve collected so eagerly, and students of political science will be led to reconsider governments’ long-standing prerogative of creating money, now the foundation of all modern monetary systems.

Finally, Selgin fills his engrossing history with concise, accessible prose. Replete with what Richard Doty, the Smithsonian's Curator of Numismatics, describes as “verve and clarity,” Good Money will attract readers of all interests and persuasions.

Praise for Good Money

“. . . a pleasure to read . . . offers economic and historical scholarship of the highest quality.”
Tyler Cowen, Director, James Buchanan Center, George Mason University

“ . . . remarkable breadth and depth of scholarship . . . ”
Charles A. E. Goodhart,Norman Sosnow Professor of Banking and Finance, London School of Economics

“George Selgin reveals the personalities and schemes intimately involved in creating the modern monetary system.”
Jack Weatherford, DeWitt Wallace Professor of Anthropology, Macalester College

Good Money: Birmingham Button Makers, the Royal Mint, and the Beginning of Modern Coinage, 1775-1821
By George Selgin
Published by The University of Michigan Press in association with The Independent Institute
August 15, 2008 | Hardcover | 384 pages | $40.00 | ISBN 978-0-472-11631-7

# # #

  • Catalyst
  • Beyond Homeless