Ben Franklin on Economics and Currency

Ben Franklin was one of the great founding fathers of our country. He is seen on he 100 dollar bill and has invented many things we use still today. Ben Franklin actually wrote about currency in 1729 right before Adam Smith’s “Wealth of Nations.” So it is interesting to see what Mr. Franklin had to contribute to Economics before Economics really existed. It is called “A Modest Enquiry into the Nature and Necessity of a Paper Currency.”

Here are some parts I found to be interesting:

“First, a great want of money in any trading country, occasions interest to be at a very high rate. And here is may be observed, that it is impossible by any laws to restrain men from giving and receiving exhorbitant interest, where money is suitably scarce: for he that wants money will find ways to give 10 per cent. When he cannot have it for less, altho’ the law forbigs to take more than 6 per cent.”

This is important and reminds me of a part of Ludwig Von Mises’ “Human Action,” which they both realize tht there is a natural rate of interest. This rate cannot be controled by government due to the fact that there is a fixed amount of money in the economy and there is a certain demand for the use of that money, hence why banks were invented.

“Upon the whole it may be observed, that it is the highest interst of a trading country in general to make money plentiful; and that it can be a disadvantage to none that have honest designs. It cannot hurt even the usurers, tho’ it should sink what they receive as interest; becase they will be proportionably more secure in what they lend; or they will have an opportunity of employing their money to greater advantage, to themselves as well as to the country.”

This is obviously touching on inflation and how Ben Franklin is trying to figure out of the world works around him. He does continue to try to figure out who is hurt and helped with the increasing amount of money.

There you have it from the man that help found this country…


Published in: on September 7, 2008 at 3:08 pm  Comments (3)  
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  1. […] Read the rest of this great post here […]

  2. Nice site and interesting bit of Franklin. I have been looking into the increasingly hostile perception of Alexander Hamilton. Actually I have been attempting to disabuse many conspiracy theorists of their obsessive belief that The Rothschilds’ hand is behind every sparrow’s fall. I did a search on AH and Rothschilds and amongst the results I found “In This Age Of Plenty” (A New Conception On Economics: Social Credit)” by Louis Evan, apparently an acolyte of a Clifford Hugh Douglas. It is on-line all 410 pages:
    Chapter 49 The History Of Banking Control in The United States quotes Franklin while he was colonial representative for PA in London. Asked to explain why the Colonies were so prosperous: “That is simple,” Franklin replied. “In the Colonies we issue our own money. It is called Colonial Scrip. We issue it in proper proportion to make the products pass easily from the producers to the consumers. In this manner, creating ourselves our own paper money, we control its purchasing power, and we have no interest to pay to no one.” This book then goes on to state that London therefore outlawed the Colonial ability to print money.
    Just thought you might know if this is true or not. The book is quite strange and worth a gander at the site above. It claims to be another one of those “third” ways that always seem to crop up every third day!

  3. Online Currency Trading – It’s Not For Everyone!…


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