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Fake Money in History

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With cryptocurrency, other of course than LoomCoin, the only true cryptocurrency and which should you give me your hard earned dollars ($$$$$ not other bullshit money) for, totally failing, it’s worth noting this isn’t the first time people have decided to just make up money with less than desired results. The historian Rebecca Spang, who is also active on ye olde twitters, recently reupped this piece she wrote in 2018 about the French Revolution’s attempt to create its own money.

The early years of the French Revolution were a time of excitement, enthusiasm, and political creativity but also of chaos and anxiety. As often happens during periods of political and social uncertainty, merchants stopped selling on credit and even people who had money became very reluctant to spend it. There had, in fact, never been enough small change in actual circulation—this was a chronic problem in medieval and early-modern Europe—but it hadn’t mattered as long as bakers, butchers, and café keepers kept accounts and had their regular customers pay every three months or so. As I explore more in my recent book, the outbreak of the Revolution changed all that, making all bills come due at once. Suddenly, there just wasn’t enough money. To deal with the crisis, the National Assembly issued large-denomination bills backed by the value of properties nationalised from the Catholic Church (these bills were called assignats because they were “assigned to” a particular fund for payment). But the smallest of the assignats was a bill for 200 livres and that was just no good for buying a cup of coffee or a loaf of bread (even when bread was expensive, you could get 800 loaves for that much money). Smaller denomination assignats were eventually issued but, before they were, literally thousands of entities—chiefly local governments, but also political clubs and for-profit businesses—responded to the 1790-1792 shortage of small change by issuing billets de confiance: small-denomination bills themselves backed by large-denomination assignats held by the issuer.

Though their circulation was never legally forced (no one was obliged by law to accept one), the shortage of any other small change meant that refusing them was not really an option for many people. The exchange relationship between buyers and sellers, like that between an employer and his wage-earning employees, was however unequal. Farmers—people who had crops to sell—were ideally positioned vis-à-vis this money of trust. If they felt so inclined, they could accept billets in payment; if they doubted them, they could take their eggs or their barley and go home. Wage workers faced a very different situation. A wallpaper painter in the Fresneau Frères’s factory, for instance, could either accept the billet she was offered or go unpaid. Bill in hand, she had then to find a baker willing to accept it. And if the billets proved an effective “stop gap” in some contexts, they were far less useful when they were carried far from their place of issue. With the outbreak of war in spring 1792, volunteer soldiers raced to the borders to defend France and the Revolution, only to find that the local money they carried was rejected by their fellow countrymen. Who, then, was the enemy?

Materialisations of old networks of trust—networks that were local, particular, and unequal—the billets were outlawed by the republican government in 1793 as it tried desperately to assert authority and build a sense of shared, national identity. The history of these radical objects suggests that decentralised money production works best where there is little, or only very regular, movement of goods and people. It also reminds us that the difference between private money (like the bills issued by manufacturers or for-profit banks) and public money (such as the bills produced by towns or districts) may be as important as that between local money and central-bank money.

Pretty interesting stuff on a topic (which let’s face it is basically all of European history, a continent about which I care probably the least on the planet except for Australia about which I really don’t care) that I know little about.

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