SOAS, University of London, Russell Square, London WC1H OXG
A high-profile international conference to commemorate the bicentenary of David Ricardo's Proposals for an Economical and Secure Currency.
Organised by Jan Toporwoski, Andrew Trigg and Richard van den Berg, the event is sponsored by the Royal Economic Society, the Ricardo Society of Japan, the OU's Open Political Economy Group, and the Money and Development Seminar of SOAS, University of London.
Speakers include: Jan Kregel, Jan Toporowski, Cristina Marcuzzo, Susumu Takenaga, Ghislain Deleplace, Pascal Bridel, Robert Dimand and David Collard.
Proposals for an Economical and Secure Currency provides a link between Ricardo's first monetary essays at the time of the Bullion Report, which made him known as an economist, and his plan for the resumption of note convertibility, which was adopted by Parliament in 1819. Enlarging a suggestion he made in the fourth (1811) edition of his famous The High Price of Bullion, a Proof of the Depreciation of Bank Notes, Ricardo introduced two main novelties for Bank of England notes: they were to be convertible into bullion instead of coin, and the quantity issued was to vary inversely with the sign of the spread between the market price of gold bullion and the legal price at which it could be obtained (against notes) at the Bank. The objective of this 'Ingot Plan' was to substitute convertible notes for specie – in short to demonetise gold in domestic circulation. As James Bonar would put it one century later, this 'complete Plan was to be the euthanasia of metal currency'. Ricardo was so confident in his ideas that he quoted four full pages of Proposals in the second and third editions of On the Principles of Political Economy, and Taxation, in an attempt to put the case for his plan in Parliament – with success in 1819, although temporarily: convertibility into coin was resumed in 1821 and no guideline for the issuing of notes was henceforth imposed on the Bank of England.
Ricardo's Proposals had to wait until the twentieth century to get recognition. In the nineteenth century, the Bank Charter Act of 1844 turned its back to them, by maintaining convertibility into coin and adopting a 100 per cent metallic backing as rule for the additional note issuing. The 'Ingot Plan' was only revived in the 1880s by Alfred Marshall in the debate on bimetallism and in the 1890s by Alexander Lindsay in the context of reform of the monetary system in India. The latter connection led John Maynard Keynes to praise it highly in Indian Currency and Finance in 1913 and to acknowledge that Ricardo had been the first to theorise the gold-exchange standard, by separating domestic circulation (exclusive of notes convertible into bullion) and foreign payments (in bullion). In Britain, it took more than a century to at last validate the ingot proposal when after WWI convertibility was resumed in 1925, without, however, breaking the 1844 Bank Charter Act.
Contrasting the received association of Ricardo with monetary orthodoxy, Proposals thus conveys an image of him far ahead of his time, with innovative solutions to guarantee the security of the currency, as emphasised in their title. This pamphlet focused on an issue which the present crisis has brought back to the top of the economic agenda: the appropriate design of a resilient monetary system.
To find out more, or to reserve your place, please email Radha Ray confirming whether you would also like to attend the conference dinner. The conference is free, but those attending the dinner will need to pay £40 in cash (sterling) at registration on the first morning.
To find out more about our work, or to discuss a potential project, please contact:
International Development Research Office
Faculty of Arts and Social Sciences
The Open University
T: +44 (0)1908 858502