“IT IS A MISFORTUNE THAT WE DESCRIBE MONEY BY A NOUN…” Monetary Practices in the Ancien Régime between History and Economics (Italy, Fifteenth to Seventeenth Centuries)

In modern capitalist economies the national currency is a public monopoly; however, both today and in the Ancient Regime, it has never been the only way to pay debts or buy goods and services. Furthermore, in the Ancient Regime, people could settle their debts by using both local and/or foreign currencies. Broadly speaking, the only ‘national’ currency mentioned in economic transactions was the unit of account, whose value was determined by local authorities. It was therefore perfectly normal for an agreement regarding, for instance, a loan of money, not to consider the local coinage as the only way to pay it back. Moreover, contracts hardly ever specified the currency in which debts should be repaid: in short, those documents only attested the existence of some liability that had to be settled, without specifying how. Unlike in Carl Menger’s hypothesis, gold and/or silver coins cannot be regarded as the result of an evolutionary path, by which people gradually chose more and more suitable payment methods. In contrast to Coase’s hypothesis, moreover, archival sources show that during the Ancient Regime coins did not represent the best way to solve problems arising from lack of information, and to overcome the inconsistencies that ‘barter’ created. On the contrary, money appears to have contributed little to the simplification of economic transactions and the reduction of transactional costs, since each coin changed its value depending on its specific state of degradation or conservation. A clue in this sense is represented by people's propensity to hoard precious gold and silver objects rather than coins. This essay will consider the most important theoretical approaches on this topic and focus on the Ancient Regime’s monetary practices, as well as on the role that conspicuous consumption, gold or silver currencies, and account money played in that system, using coeval archival sources. It will then examine how the possibility to change precious objects into coins (by melting, pawning, or bartering them) allowed the latter to perform monetary functions. It will analyze how these practices were also facilitated by attempts to maintain the technical fungibility among objects and coins, while the national account money was the means used to make explicit the link between value, estimates, and prices. Finally, the essay will investigate the importance of private money, i.e., debt notes issued by individual economic actors in reducing the need for cash.