II. CRISIS AND CURRENCY: ENGLAND’S MONETARY TURMOIL IN THE 1690S

By the late seventeenth century, England faced profound turmoil. Although later celebrated as the “Glorious Revolution,” the events of 1688–89 had uncertain outcomes throughout the 1690s. The political fate of the revolution remained unsettled and the nation was plagued by financial and monetary crises. The war against France strained royal finances, making military victory and the regime’s consolidation contingent on fiscal strength. This challenge spurred the transformation of public finance centered on the newly established Bank of England (Rubini Reference Rubini1970; Desmedt Reference Desmedt and Théret2007; Roche Reference Roche2021).

Alongside the strain on public finances, the currency was in disarray. Coins were scarce, clipped, and degraded, prompting hoarding of full-weight coins and a rise in silver bullion prices. This led to melting and exporting coins, further diminishing the circulating supply. Gold guineas appreciated as silver coins lost value. Counterfeiters, though illegal, were tolerated to alleviate liquidity shortages. However, widespread coin degradation increased transaction costs and commercial confusion, creating a crisis of trust in money (Desmedt Reference Desmedt and Théret2007, p. 327).

Parliament considered two key proposals to face these challenges. Josiah Child’s anonymously published A Discourse about Trade (1690) argued that low interest rates were the causa causans of Dutch prosperity and urged statutory interest rate reductions that “would in a short time render us as Rich and Considerable in Trade as they are now” (quoted in Letwin Reference Letwin1959, p. 45). In his reasoning, a lower legal rate would raise the capital value of land, stimulate borrowing, and thereby increase monetary circulation (Dang Reference Dang1997). This was not a novel proposal. The same policy had already circulated through Parliament in the late 1660s. In 1668, a bill to reduce interest was before the House of Commons, and in 1669, the House of Lords’ trade committee examined Child’s early advocacy for the measure, anonymously published as Brief Observations concerning trade, and interest of money (Tucker Reference Tucker1960, p. 9; Letwin Reference Letwin1959). In the late 1660s, Locke served as personal secretary to Lord Ashley, who sat alongside Child in the newly founded Council of Trade, and that controversy prompted his first engagement with monetary issues, Some of the consequences that are like to follow upon Lessening of Interest to 4 per cent (Kelly Reference Kelly and Locke1991, pp. 9–10).

The second proposal sought to “raise” the value of English coin. As discussed below, Locke targeted precisely the ambiguity of the word raise. Though initially dismissed, the worsening crisis led William Lowndes, Secretary of the Treasury, to revive the idea in his Report of 1695 (Lowndes Reference Lowndes1695; Coutinho Reference Coutinho2011). Understanding Lowndes’s proposal requires distinguishing between the “extrinsick value” of coins (their denomination in pounds, shillings, and pence) and their “intrinsick value” (their silver content). Lowndes proposed raising the extrinsic denomination by 25% while leaving the intrinsic silver content unchanged: A crown of the same silver weight as before would henceforth be “currant at” 6 shillings 3 pence instead of 5 shillings. The mint would continue striking coins of the same weight and fineness but at higher face values, raising the money “foot”—the mint’s accounting relation between weight and denomination, expressed as the number of units of account from a Troy pound of standard silver—from 62 shillings to 77½ shillings per Troy pound. For Lowndes, “raising the value” meant raising denomination, not adding silver, and this is precisely the equivocation Locke will charge.

Lowndes framed his proposal not as arbitrarily inflating the currency but as recognizing a change that had already occurred in the market. He observed that silver bullion traded at about 6s 5d per ounce, while coined silver remained legally rated at only 5s 2d per ounce, creating a profit of over 14 pence on every crown melted and sold as bullion. As he puts it, whenever extrinsic value falls below bullion price, “the Coin hath been, and will be Melted down” (Lowndes Reference Lowndes1695, p. 68). He concluded that coins could “be Currant” only if the foot adjusted to “the very Price of the Silver thereof” (Lowndes Reference Lowndes1695, p. 78). Hence, he expected this nominal adjustment to yield real effects on the quantity of silver in circulation. Raising the denomination to match the bullion price would remove the incentive to melt, deter export, draw hoarded full-weight coins back into use, and encourage merchants to bring silver to the Mint rather than sell it as bullion. In turn, increasing the amount of silver money in circulation would support the war effort (1695, pp. 82–84).Footnote ²

To support his plan, Lowndes referred to historical precedent, documenting centuries of adjustments to the monetary foot, while explicitly distancing his proposal from debasement (Lowndes Reference Lowndes1695, p. 30). In his usage, “debasement” denoted specifically the corruption of the alloy by reducing the silver content and altering the sterling standard of fineness. Analytically, raising the foot and debasing the alloy are equivalent in their effect on silver-per-shilling and either could be described as “devaluations” in unit-of-account terms; Lowndes nevertheless offered several reasons for treating debasing the coinage as “Dangerous, Dishonourable and Needless” (Lowndes Reference Lowndes1695, p. 58). First, the present scarcity of silver was understood as temporary, so a debased coin would inflict lasting losses on Crown revenues and creditors when silver fell back (Lowndes Reference Lowndes1695, pp. 31–32). Second, the sterling standard was “well known in the World” and foreigners regarded “the Intrinsick Value more than the Extrinsick Denomination” in exchange (Lowndes Reference Lowndes1695, p. 32). These consequences had already given Henry VIII’s and Edward VI’s debasements their lasting disrepute, and Lowndes warned that any new debasement would similarly “Disgrace this Government in future Generations” (Lowndes Reference Lowndes1695, p. 30). In short, the two operations converged in their arithmetic effect on silver-per-shilling but diverged sharply in their practical consequences. Thus any advantage debasement might claim “will arise more easily, and have better Precedents in Raising of the Value of the Standard” (Lowndes Reference Lowndes1695, p. 33).

Nicholas Barbon, who had already intervened with A Discourse of Trade (1690), came forward to vindicate Lowndes—against Locke—in A Discourse Concerning Coining the New Money Lighter (1696). Barbon’s fundamental thesis was: “Mony is a Value made by a Law; And the difference of its Value is known by the Stamp, and Size of the Piece” (Barbon [1690] Reference Barbon and Hollander1905, p. 16). Moreover, he insisted that money, not silver, was the instrument and measure of commerce. Commerce does not compute with bullion weights or with the market rate of silver; instead, silver becomes money proper when public authority “sets and fixeth a certain value to each piece,” which people then exchange “by tale and number … without regarding the weight and quantity” (Barbon Reference Barbon1696, p. 17). The mundane world of small payments, he contended, confirmed the argument: Retail trade ran on copper coins, and “Six Pence in Farthings will buy the same thing as Six Pence in Silver” (Barbon [1690] Reference Barbon and Hollander1905, p. 17). On this view, the passing of clipped coins at face value was not anomalous; it simply made explicit that the ordinary rule of exchange is payment by denomination, rather than by bullion content.

Barbon extrapolated this to foreign exchange and the “par” of money. Against the notion that foreign trade equaled national monies according to their silver quantities, Barbon insisted that evidence suggested otherwise. Merchants drew bills and kept accounts not only in silver units but as often in copper or base money, and accounting units varied “according to the rise of the Exchange” (Barbon Reference Barbon1696, p. 14). Parity, then, was not a static identity of silver content but a moving relation shaped by acceptance and valuation in payments. The contrast between domestic and foreign circulation sharpened the mechanism: Where “the Law has no Force,” coins “yield no more than the Price of the Metal,” so foreign coins “go by Weight” and “rise and fall with the Price of the Metal” (Barbon [1690] Reference Barbon and Hollander1905, p. 17). In Barbon’s framework, this is what made raising denomination intelligible: not conjuring value from nothing but recalibrating the denominational scale through which obligations are discharged.

III. LOCKE’S INTERVENTION IN THE MONETARY DEBATES

Locke’s engagement with monetary questions began in the late 1660s, when he drafted a manuscript responding to Josiah Child’s early advocacy of a statutory reduction in interest rates. When Child’s proposal resurfaced in the early 1690s, Locke reworked that material into Some Considerations of the Consequences of the Lowering of Interest and Raising the Value of Money (1691), published anonymously and framed around the renewed controversy over interest policy and currency reform. The debate then shifted to the recoinage crisis and William Lowndes’s proposal to “raise” the value of the coin, prompting Locke to sharpen his position in Further Considerations Concerning Raising the Value of Money (1695; in Locke Reference Locke and Kelly1991b), which he then published under his own name.

Locke’s rejection of Child’s and Lowndes’s proposals follows from two connected commitments: a theory of money’s essence—what money is within his broader moral and political philosophy—and an account of how monetary stability depends on trust and consent. This section sketches Locke’s basic understanding of money and demonstrates how trust figures as the decisive factor in his rejection of the leading reform proposals.

Money lies at the heart of Locke’s political philosophy, namely, in the theory of property in chapter V of the Second Treatise of Government. Joseph Schumpeter’s claim that Locke’s economic thought stands “in no relation to either his philosophy or his political theory” is untenable (Schumpeter Reference Schumpeter1972, p. 117). Locke’s account of property rights, and thus of money, rests on a theological, moral, and political framework in which (property) rights precede any civil authority (Tully Reference Tully1982). More radically, property rights arise from the individual’s direct relation to nature and precede even interpersonal relations (Manent Reference Manent2012). Appropriation originates in man’s right to preservation and the labor required for subsistence (Locke Reference Locke and Laslett1988, pp. 285–288). Yet it is morally constrained by that same end, for property becomes illegitimate when it involves waste (Locke Reference Locke and Laslett1988, pp. 292–293). The distinction between usus and abusus is hence fundamental (Priddat Reference Priddat, Rehm and Ludwig2012, p. 82).

Money, necessarily metallic for Locke, enters this scheme as a mediating institution that normatively grounds property accumulation and inequality without violating the spoilage constraint. Because natural law bounds property to use, and because metals do not satisfy “real” needs, the accumulation of money does not deprive others of the means of preservation. The underlying assumption distinguishes between natural and imaginary needs: Precious metals are “things, that Fancy or Agreement hath put the Value on, more than real Use, and the necessary Support of Life” (Locke Reference Locke and Laslett1988, p. 300). The notion of “imaginary value,” which bothered many political economists, is a normative condition. It establishes that the substance of money cannot be something necessary to support life, or else accumulation would be illegitimate. The advent of money, something “both lasting and scarce, and so valuable to be hoarded up,” instals therefore the motive for accumulation (Locke Reference Locke and Laslett1988, p. 301). As Istvan Hont summarizes, the advent of money “broke all the natural limits of primitive society” (Hont Reference Hont2015, p. 67).

Recent studies have established that the Lockean state of nature is marked by two stages: a pre-monetary condition of natural freedom and abundance, and a monetary stage characterized by accumulation, inequality, and relative scarcity (O’Brien Reference O’Brien2007, p. 689).Footnote ³ Of great consequence to Locke’s intervention in the monetary debate is the assumption that both property and money originate within the state of nature—prior to any political authority—and are logically and normatively coherent in this pre-political condition. However, they operate at distinct levels. Property arises from a private act—labor—that does not require the consent of others, since “[i]f such a consent as that was necessary, Man had starved” (Locke Reference Locke and Laslett1988, p. 288). Money, by contrast, is a fundamentally intersubjective institution that presupposes a general consent among participants.

The normative framework established above—money as necessarily metallic and as a logically coherent institution in the state of nature—yields two core commitments in Locke’s monetary theory. First, the value of money lies in the intrinsic value of the (metallic) substance. Second, all contracts and transactions are made in terms of silver content, not accounting denominations (Locke Reference Locke and Kelly1991b, p. 410). Money serves two roles. It functions as a counter for reckoning, where denomination and stamp are sufficient for calculation, but it also functions as the instrument of commerce, where it must operate as a generally accepted pledge in exchange. That second role requires “intrinsick Value” because a pledge must retain value over time rather than merely name it (Locke Reference Locke and Kelly1991a, p. 233).

Against that backdrop, Child’s and Lowndes’s reform proposals appear as ineffectual and illegitimate. Child’s statutory interest reduction would not expand borrowing but would instead discourage lending and harm small rentiers like widows and orphans (Locke Reference Locke and Kelly1991a, pp. 212, 215). Lowndes’s proposal was ineffectual in a different sense. Altering the denomination would not “raise” the value of money since, as William Petty had argued a decade earlier, it would create more “christened Shillings” but add “not an Ounce more of Silver” (Petty Reference Petty and Hull1899, p. 441). That advocates framed their proposal as “raising” the value of money was, at best, a complete lack of clarity about value or, at worst, a tricky deception (Locke Reference Locke and Kelly1991a, pp. 309, 330; 1991b, p. 416).

Altering the denomination was not merely ineffectual but illegitimate. Since current contracts were fixed under the present denomination, a devaluation of coins would transfer money, i.e., silver, from creditors to debtors and from landlords to tenants. The state would thus deliberately “by a Law, post factum, void Bargains lawfully made, and give to Richard what is Peters Due” (Locke Reference Locke and Kelly1991a, p. 219). Such redistribution by legislative fiat constituted a breach of the trust deposited in government.

This is where contemporaries pressed a counterpoint. Restoring the full standard also carried heavy distributive consequences, since many contracts made during the years of clipped currency were negotiated against the effective state of the circulating coin. Henry Layton accordingly faulted Locke for extending “his Care to Creditors and Landlords,” while ignoring the predicament of tenants and debtors compelled to repay “in heavy Money, perhaps of twice the weight” (Layton Reference Layton1697, p. 13; see also Appleby Reference Appleby1976, p. 58). Commenting on the controversy, Karl Marx and Friedrich Engels (Reference Marx and Engels1980, p. 150) offer a useful warning against recoding it as simple opposition between nominalism and metallism in Georg Friedrich Knapp’s (Reference Knapp1924) later sense. Lowndes’s proposal, by aligning legal denomination with the average silver content of the currency, showed greater sensitivity to the material referent presupposed in recent contracts. Locke, by contrast, focused on the sanctity of nominal contracts indexed to pounds and shillings, downplaying the extent to which those nominal units had been practically mediated by clipped coin, and thus bracketed the distributive effects of enforcing repayment in heavier, recoined money. In this light, their positions seem to invert: Lowndes appears as a metallist, while Locke as a nominalist.

This conceptual inversion is not merely a formal exercise. It brings into view what is most distinctive about Locke’s stance, namely, that his primary concern was not the immediate economic effects or fiscal requirements of this or that adjustment but the preservation of public trust as a condition of monetary order (Eich Reference Eich2022, p. 121). From that normative standpoint, Lowndes’s proposal amounted to ratifying clipping and letting the “clipper’s shears” regulate “a new sort of coin” (Locke Reference Locke and Kelly1991b, p. 423). Such a concession would, in Locke’s view, signal the government’s failure to uphold trust and “weaken, if not totally destroy the publick Faith” (Locke Reference Locke and Kelly1991b, p. 417). Restoring trust in money and public faith was Locke’s unnegotiable priority even at the cost of pernicious effects in the short run. To make sense of this priority, the argument must now turn from policy controversy to the underlying architecture of trust in Locke’s thought, beginning with its most general and morally saturated form.

IV. THE FIRST MODEL OF TRUST: FIDES

From his earliest writings, Locke recognized the foundational role of trust in human relations. In the Essays on the Law of Nature, he described trust as the societatis vinculum—the bond that holds society together (Locke Reference Locke and von Leyden1954, p. 212). This idiom draws on the Roman notion of fides and echoes Cicero’s De Officiis, where “the foundation of justice … is good faith [fides]—that is, truth and fidelity to promises [dictorum] and agreements” (Cicero Reference Cicero1913, vol. 30, p. 24). In its early Roman form, fides referred to sacred obligations, typically sealed by oath (Wieacker Reference Wieacker1988, p. 506; Wilde Reference Wilde2011, p. 460), later widened into a broader moral quality—bona fides—encompassing trustworthiness, dependability, credit, and fidelity to promises.Footnote ⁴

Different dimensions of fides appear throughout Locke’s work. Reputation, esteem, and credit occupy a central place in his moral vocabulary (Cooper Reference Cooper2021), and he treats promise keeping and contract fulfillment as essential to sociability (Locke Reference Locke and von Leyden1954, p. 119). In this respect, his account of personal identity in the Essay (Locke Reference Locke and Nidditch2011) supplies a conceptual basis for the register of fides at issue here, by specifying how commitments remain imputable to the same moral agent across time (Balibar Reference Balibar1995). Locke maps moral duties onto the framework of natural law, understood as divine command backed by a structure of sanctions, binding universally on all rational beings—including magistrates. This modality of trust is neither reposed nor forfeited at will, since it flows from natural law itself; nor is it limited to a specific end, since it requires general subordination to a moral law. Finally, it carries its own structure of sanctions, encompassing divine punishment, moral opprobrium, and civil punishment (which, in the state of nature, may be administered by any individual).

The same moral logic that makes promising binding also undergirds any coordinating system of conventional signs, including language and money. Language is conventional: Words do not immediately express things themselves but only signify those “Ideas we have in our Minds” (Locke Reference Locke and Nidditch2011, p. 407). But these ideas are invisible to others and made publicly accessible only through speech. Speech carries, then, a normative charge: To speak, to give one’s word, is to make oneself answerable for what has been said and to place others in a position to rely on it. Through repeated use, signs stabilize into a system of shared meanings. Still, as a convention, language remains inherently unstable. This instability is especially pronounced in the names of “mixed modes” as opposed to “substances” (Dawson Reference Dawson2005). Locke recognized the political dangers of semantic ambiguity. Like Thomas Hobbes, he believed that “the tongue of man is a trumpet of warre and sedition” (Hobbes Reference Hobbes and Warrender1983, p. 88), but he could never accept Hobbes’s remedy: that the sovereign authority must fix the meaning of words to avert disorder. Since political decree cannot solve linguistic instability, Locke ultimately relies on the moral integrity of speakers.

That same dependence on fides reappears in monetary practice. When money serves as a “counter” for reckoning, it functions as a conventional sign much like words. Even in the absence of political authority, individuals can exchange silver by weight, according to a shared standard of fineness (Locke Reference Locke and Kelly1991a, p. 311). But if an agent repays a debt due in two ounces of silver by tendering only half that quantity, justifying it by claiming that “for me, ‘two ounces of silver’ means something else,” this is an act of mala fides. It violates the convention that renders accounting possible and, within Locke’s framework, it is morally reprehensible and potentially punishable. Locke draws the analogy between monetary and linguistic signs explicitly: “For Words, especially of Languages already framed, being no Man’s private possession, but the common measure of Commerce and Communication, ’tis not for any one, at pleasure, to change the Stamp they are current in” (Locke Reference Locke and Nidditch2011, p. 514).Footnote ⁵

The implications are not merely semantic. For money to function as an instrument of commerce, the same moral presuppositions that sustain commerce more generally must be in place: a shared disposition to keep contracts, deal fairly, and respect others’ rights—in short, a reasonable degree of fides. In a monetary economy within the state of nature, where individuals are bound only by the law of nature, commerce is therefore possible but structurally fragile. Fraud, counterfeiting, and deceit can rapidly corrode confidence and choke off exchange. Though such wrongs fall under and are sanctionable by the law of nature, Locke doubts that fides can reliably sustain commercial and monetary order on its own. Natural law binds rational agents as a divine command backed by sanctions (Locke Reference Locke and Nidditch2011, p. 351), but Locke could not demonstrate the “cognitive accessibility” of the sanction structure required to lend that law effective authority (Dunn Reference Dunn1996, pp. 112–113). Revelation thus becomes decisive for securing obligation by affixing punishment to moral law, hence the political salience of atheism: Without the threat of divine punishment, “Promises [fides], Covenants [pactum], and Oaths, which are the Bonds of Humane Society,” lose their grip (Locke Reference Locke and Goldie2016, p. 159; Reference Locke and Montuori1963, p. 92).Footnote ⁶ And even short of atheism, the opacity of enforcement, ordinary moral laxity, and the prospect of gain make it unrealistic that “a man would abide by a compact because he has promised it, when better terms are offered elsewhere” (Locke Reference Locke and von Leyden1954, p. 119).

For these reasons, moral fides is an unstable foundation for money and commerce. Therefore, Locke turns to the civil condition wherein positive laws and a civil structure of sanctions are declared. This shift introduces a second modality of trust in which political authority itself is conceived as a fiduciary power held under conditions of accountability.

V. THE SECOND MODEL OF TRUST: TRUSTEESHIP

Locke was undoubtedly sensitive to the centrality of trust in weaving social relations. Commenting on this, John Dunn remarks that his moral philosophy challenges “the alienated modern conception of the context of political agency and the predominantly instrumental character which dominate modern political thinking” (Dunn Reference Dunn, Schneewind, Skinner and Rorty1984, p. 302). Nonetheless, this formulation risks obscuring a crucial distinction in Locke’s theorizing of trust. When he models political authority as a “fiduciary power,” he is not drawing on moral fides but on the common-law model of trusteeship. In this register, trust is, contrary to Dunn’s conclusion, conditional, end-directed, and thoroughly instrumental. This section explores this second model and indicates how it shapes Locke’s monetary recommendations.

The paradigmatic articulation of this model appears in the Two Treatises. As Frederic Maitland (Reference Maitland, Runciman and Ryan2003) describes, trusteeship was a typical category of English common law. Unlike fides, which binds all rational beings universally, trusteeship denotes a particular relation between identifiable parties—a beneficiary and a trustee—in which a power is vested for a determinate end under fiduciary duties. Unlike fides, which flows from divine command and cannot be relinquished, trusteeship is reposed for a specific purpose and revocable for cause. When the entrusted end is defeated, trust is violated, and the power is forfeited. Locke draws on this model when he writes: “For all Power given with trust for attaining an end, being limited by that end, whenever that end is manifestly neglected, or opposed, the trust must necessarily be forfeited, and the Power devolve into the hands of those that give it” (Locke Reference Locke and Laslett1988, p. 367).

Locke models political authority according to this logic. The fundamental motivation is straightforward: Trusteeship supplies the architecture of limited government. The complexities of applying a private corporative model to political organization cannot be addressed here; what matters are the elements that bear on Locke’s account of monetary governance.

The basic condition for applying this corporative model is Locke’s premise that legitimate rights, including property, exist in the state of nature prior to political authority. In that condition, individuals hold a natural executive power to enforce the law of nature. Civil society arises when that executive power is transferred to a common authority to address the instability generated by partiality and contestation in the absence of a settled judge. Since most men are “no strict Observers of Equity and Justice” (Locke Reference Locke and Laslett1988, p. 350), the state of nature tends toward a state of war, and avoiding this state of war is the “great reason of Mens putting themselves into Society” (Locke Reference Locke and Laslett1988, p. 282). Accordingly, individuals surrender their natural executive power to a common authority (Locke Reference Locke and Laslett1988, p. 352). Yet this surrender is not unconditional. Political power is entrusted to the magistrate for a specific end—securityFootnote ⁷—and is limited by that end.

In short, political trusteeship presupposes antecedent property rights and delimits the scope of political power and conditions it. Since there is no earthly judge above the sovereign, breach of political trust is not legally actionable like corporate trusteeship but politically actionable through resistance. Fides still applies to magistrates as moral agents, so that rulers are bound to act in good faith when exercising the “trust of prerogative,” which grants the prince “Arbitrary Power in some things” about which the law is silent (Locke Reference Locke and Laslett1988, p. 367). However, what defines political power is not fides but trusteeship: conditional, limited, and forfeitable.

This model determines Locke’s understanding of the prince’s role in monetary affairs. Once political authority is instituted, management of monetary affairs is entrusted to the state. At the most general level, the state establishes conditions for commerce by securing property rights, punishing crimes, and enforcing contracts (Locke Reference Locke and Kelly1991b, pp. 413, 415). Regarding money proper, its most important function is coining pieces whose quantity and fineness are ascertained by a public mark. Coinage remedies two inconveniences of exchange by weight: the need to weigh silver in ordinary payments and the technical difficulty of ascertaining its fineness (Locke Reference Locke and Kelly1991a, p. 312). The stamp, Locke writes, is the “publick voucher of the intrinsick value” of coins (Locke Reference Locke and Kelly1991a, p. 312).

Directly connected to coinage is the duty to prevent and punish monetary crimes, especially counterfeiting and clipping: “If this Security goes not along with the publick Stamp, Coining is labour to no purpose” (Locke Reference Locke and Kelly1991b, p. 414).Footnote ⁸ Interestingly, these wrongs are structurally enabled by coinage itself. Under exchange by weight and assay, there is no publicly warranted face value detachable from metallic content. But once the stamp circulates as public guarantee, a clipped coin can pass at a valuation exceeding what its diminished content would otherwise command. Because they pervert a public warranty, Locke treats them as the highest crime, indeed, as treason (Locke Reference Locke and Kelly1991a, p. 312). In the 1690s, counterfeiting and clipping severely eroded public trust in currency, making deterrence and punishment urgent priorities.Footnote ⁹ Yet Locke remained skeptical that penalties alone could deter clipping: “Clipping is so gainful, and so secret a Robbery, that penalties cannot restrain it” (Locke Reference Locke and Kelly1991b, p. 418). The appropriate remedy, in his view, was to remove the incentive altogether by “making all light Money go only for its weight” (Locke Reference Locke and Kelly1991b, p. 418)—in effect, suspending the authority of the stamp and reverting valuation to pre-coinage weighing.

Other functions of the state concerning monetary affairs mentioned by Locke—establishing a monetary unit of account and enforcing legal tender—must be handled with care. Unlike coining and punishing counterfeiting, which Locke treats as essential to trusteeship, these two functions occupy a different status. Locke acknowledges and discusses them because they exist as matters of fact but regards neither power as belonging to the original mandate. On the question of denomination, Locke writes: “The Royal Authority gives the stamp; the Law allows and confirms the denomination: And both together give, as it were, the publick faith, as a security, that Sums of Money contracted for under such denominations, shall be of such a value, that is, shall have in them so much Silver” (Locke Reference Locke and Kelly1991a, p. 312).

Money, as a counter for reckoning, must be expressed in some denomination, but it does not follow that the denomination must be conceptually distinct from a unit of weight. Otherwise stated, political authority does not create money’s reckoning function. Erecting a monetary standard (pounds, shillings, pence) alongside the weight standard (pounds, ounces, pennyweights) introduces a new insecurity: the illusion that value can be altered by manipulating the monetary “foot.” This is why Locke’s rejection of Lowndes turns on public faith and the sanctity of contracts: “For Money having been Lent, and Leases and other Bargains made, when Money was of the same Weight and Fineness that it is now, upon Confidence that under the same names of Pounds, Shillings and Pence, they should receive the same value (i.e. the same quantity of Silver)” (Locke Reference Locke and Kelly1991a, p. 310).

In a letter to William Molyneux, Locke suggests that the apparent mystery of money dissolves once one strips it “of the cant which all men that talk of it, involve it in,” lays aside the arbitrary names of pence and shillings, and speaks instead in “grains and ounces of silver” (Locke Reference Locke and by1979, p. 463). The point is that the denomination is arbitrarily conventional. He would not contest Knapp’s view that the unit of account is always a historically contingent convention, devoid of technical justification (Knapp Reference Knapp1924, p. 11). The decisive Lockean claim is fiduciary constraint: Whatever contingencies produced the existing foot, it must remain unchanged, so that the same names always designate the same quantities (Locke Reference Locke and Kelly1991a, p. 329; 1991b, p. 414). This stability is the mandate entrusted to political authority.

The intimate link between silver and the unit of account also becomes clear regarding bimetallism. Since the pound sterling is an ideal unit of account distinct from any weight-unit, the state might appear able to legislate that coins of different metals—or even paper instruments—count as equivalent instantiations of the same denomination. If this were possible, then political authority would possess the power to constitute “currency” by legal parity. Locke goes to considerable lengths to deny this conclusion.

His argument proceeds in three steps. First, he determines that only one metal—silver—can serve as the measure of commerce (Locke Reference Locke and Kelly1991b, p. 422). The point is not that silver is metaphysically changeless but that any measure must be stable in fixing what the denomination means across time. Silver is invariable to itself in the minimal sense required for measurement—“An Ounce of Silver is always of equal value to an Ounce of Silver” (Locke Reference Locke and Kelly1991b, p. 422)—whereas no fixed market rate holds between heterogenous things (i.e., silver and gold).Footnote ¹⁰ Second, Locke concedes that gold should be coined for the convenience of public certification. Yet gold coins should circulate at market-determined rates expressed in the silver standard. Third, coercively fixing a legal rate of gold, i.e., making it current at a stated value, cannot succeed. If the legal rate diverges from the market ratio, the undervalued metal is drained by foreign arbitrage, hoarded by the public, or traded at more than the law determines (Locke Reference Locke and Kelly1991a, p. 326). In every case, the state’s attempt to legislate value defeats itself.

Locke’s argument against paper currency pushes the same point to its outer limit. His reasoning deserves quotation: “Since the Bill, Bond, or other Note of Debt, I receive from one Man will not be accepted as Security by another, he not knowing that the Bill or Bond is true or legal, or that the Man bound to me is honest or responsible and so is not valuable enough to become a current Pledge, nor can by publick Authority be well made so, as in the Case of Assigning of Bills” (Locke Reference Locke and Kelly1991a, p. 234).

The passage marks the outer limit of both models of trust examined so far. On the side of trusteeship, the state can authenticate quantity and fineness, maintain the standard, and punish counterfeiting or clipping, but it cannot confer an intrinsic value on something by decree, or sustain legal parity when market valuation diverges. On the side of fides, a bill cannot become a current pledge because the issuer’s moral reliability and economic capacity cannot be made transparent to strangers at the scale required for circulation. The problem, then, is no longer institutional design or moral reliability but the basis on which a thing can command general acceptance as a pledge. That is the question that now comes to the foreground: What, for Locke, is the “intrinsick value” that qualifies silver to play this role, and how can such value be stable enough to anchor exchange beyond both fiduciary power and moral trust?

VI. THE THIRD MODEL OF TRUST: CONFIDENCE

What, then, is “intrinsick value”? At first sight, Locke employs the term conventionally to refer to the material content of money (silver) as opposed to extrinsic denomination. Yet his claim goes beyond this distinction. Silver is not merely the stuff of money; it is what money is. Silver itself, he insists, possesses intrinsic value. Such an essentialist connotation sits uneasily beside his broader epistemology. It is striking that a thinker who insisted in the Essay that the meaning of signs is conventional and relational does not extend this nominalism to money (O’Brien Reference O’Brien2007, p. 686). But when pressed to specify the source of silver’s intrinsic value, Locke offers a surprising answer: It is what “the universal Consent of Mankind has annexed to Silver and Gold” (Locke Reference Locke and Kelly1991a, p. 234) or “the estimate which common consent has placed on it” (Locke Reference Locke and Kelly1991b, p. 410). Because this collective attribution is universal and stable, it enables silver to serve as a generally accepted security: “Mankind, having consented to put an imaginary Value upon Gold and Silver … have made them by general consent the common Pledges” (Locke Reference Locke and Kelly1991a, p. 233).Footnote ¹¹

A puzzle immediately follows from Locke’s phrasing. There seems to be a paradox in defining the intrinsic value of silver as something “annexed” to it. Intrinsic value suggests something inherent by nature, whereas an annex suggests something conferred from the outside, hence “extrinsic.” Barbon seized on the tension. With caustic irony, he demanded Locke give an account of how and when mankind made such an agreement, for he confesses: “I never hear’d of any” (Barbon Reference Barbon1696, p. 9). Barbon’s sarcasm exposes, however, a genuine gap: If money’s value rests on consent, then the character of that consent requires explanation.

The nature of this consent—how it operates, what sustains it, and why it can ground value where fides and trusteeship cannot—will prove to disclose a third dimension of trust, one that Locke gestures toward but never fully articulates. Although Locke never explicitly named it, his appeal to a socially stabilized “intrinsick value” presupposes a modality of trust distinct from fides and fiduciary power. For the purposes of the present argument, this third model will be reconstructed under the heading of confidence.

The preceding analysis of gold coins and paper instruments demonstrated that Locke consistently rejected the state’s capacity to confer intrinsic value upon objects lacking it. At the same time, Locke’s definition of intrinsic value as an imaginary value annexed to silver by consent forecloses any metaphysical reading of intrinsic value as something inherent by nature. What kind of consent, then, could ground monetary value if reducible neither to natural fact nor political authority?

A recent interpretation by Andrew Sartori (Reference Sartori2021) offers a crucial insight. Sartori argues that Locke’s monetary thought discloses a specifically social dimension irreducible to either pole of the traditional physis/nomos dichotomy. Locke’s universal consent of mankind points toward what he calls a “social form” understood as “a medium of a spontaneous ordering of interdependence among private individuals in collective life, neither divinely instituted, nor a reflex of nature, nor a product of political authority” (Sartori Reference Sartori2021, p. 504).

This formulation brings the core issue into focus. The consent underwriting value is a social fact crystallizing out of the practical coordination of traders, creditors, and payers. Precisely because this coordination is forward-looking, it presupposes a distinctive modality of trust: confidence in the continuing intelligibility of the convention. That becomes visible as soon as attention shifts from “value” in the abstract to the pledge function Locke repeatedly insists upon. A pledge is not merely a present equivalent; it is a transferable security accepted now because of the confidence that it will be acceptable again, that is, it will preserve its capacity to command goods or discharge obligations in the future.

Georg Simmel captured this deeper sense of trust at work in any metallic system. Though metallic money seems the opposite of fiduciary money, it fundamentally relies on “two presuppositions of credit” (Simmel Reference Simmel2004, p. 177).Footnote ¹² The first is belief in the coin’s weight and fineness, guaranteed by fiduciary power. The second, more pertinent here, is the confidence that money will be accepted again at the same value. This latter presupposition, Locke insists, cannot be guaranteed by sovereign authority. It rests, in Simmel’s words, on a “social-psychological quasi-religious faith” that is “both less and more than knowledge” (Simmel Reference Simmel2004, p. 178). The phrase marks the distinctive register of confidence: less than knowledge in that it cannot be evidentially demonstrated—no agent can prove that tomorrow’s acceptors will accept—and more than knowledge in that it commits the agent practically and affectively to a coordinated practice in a way that mere belief about a fact would not.

In short, this confidence expresses a tacit social fact: Individuals universally treat silver as valuable because they expect others to do the same. Its value is not natural; it is imagined. And yet this imaginary value behaves as if it were natural. Locke’s own words are revealing: “Intrinsick value, though it be not natural but is only in the opinion of men consenting to it, yet being universall has generally … the same effect as if it were natural” (Locke Reference Locke and Kelly1991a, pp. 172–173). This is the paradox of social facts: They are human creations that confront their creators with the force of objectivity. Confidence is trust in such facts. Trust not in persons (fides) or institutions (fiduciary power) but in the impersonal regularity of a convention sustained by generalized expectation.

VII. CONFIDENCE IN MONEY BEYOND FIDES AND TRUSTEESHIP

The preceding section argued that monetary confidence constitutes a third modality of trust in Locke’s thought, distinct from interpersonal moral obligation (fides) and the fiduciary power entrusted to civil authority. This section sharpens that account by engaging with leading interpretations and asking whether the confidence framework illuminates specific tensions in Locke’s scholarship. For this purpose, it first considers George Caffentzis’s (Reference Caffentzis2021) attempt to derive monetary consent from Locke’s moral psychology, then turns to the naturalization/depoliticization debate (Appleby Reference Appleby1976; Eich Reference Eich2022).

Caffentzis (Reference Caffentzis2021) suggests that the best framework to capture the internal logic of monetary consent is provided by Locke’s (Locke Reference Locke and Nidditch2011) notions of wit (developed in Essay II.11.2) and law of opinion or law of fashion (developed in Essay II.28). In Locke’s epistemology, wit stands in contrast to judgment. While judgment differentiates and separates ideas through analysis, wit links them through association and resemblance. It is this associative capacity, Caffentzis argues, that annexes value to silver (Caffentzis Reference Caffentzis2021, p. 102; Locke Reference Locke and Nidditch2011, p. 156). Yet because it associates arbitrarily, Caffentzis turns to the law of fashion or law of opinion to account for the practical stabilization of these associations into conventions.

Locke introduces the law of fashion as one of the three moral frameworks—alongside divine law and civil law—in reference to which human actions are judged (Locke Reference Locke and Nidditch2011, p. 352). Under divine law, actions are evaluated in terms of sin or duty; under civil law, they are assessed as criminal or lawful; and under the law of opinion, they are judged as virtuous or vicious based on prevailing social norms. The foundation of the law of opinion is, crucially, a “secret and tacit consent” emerging spontaneously within a given society (Locke Reference Locke and Nidditch2011, p. 353). It governs reputation and esteem, shaping behavior by aligning it with what is deemed socially admirable or shameful.

Caffentzis’s interpretation is illuminating in two respects: It clarifies how value is imaginarily annexed to a material, and it points to the way tacit conventions govern human conduct without explicit legislation. Yet, imported into Locke’s monetary argument, these analogies risk pulling the explanation toward the esthetic (fancy) and the moral (reputation), whereas Locke’s decisive move is to evacuate both domains from money. As Sartori (Reference Sartori2021, p. 527) aptly notes, “in order to reduce money to its silver content, Locke had to reduce silver itself to its money function.” In Locke’s monetary writings, silver is treated neither as an ornament nor as an ordinary commodity. The doctrine of “intrinsick value” is paradoxical for exactly this reason: The “value” that matters is not a property silver has prior to its monetary role—esthetic or economic—but the status it acquires as the measure and pledge of commerce. Intrinsic value names money’s capacity to operate as the standard underwritten by a general practice of acceptance.

It is unsurprising, then, that eighteenth-century political economists, seeking a general theory of value applicable across the world of commodities, including the commodity money, found Locke’s position either puzzling or untenable. Against Locke’s own phrasing, Ferdinando Galiani includes him among those who deny the intrinsic value of metals (Galiani Reference Galiani1915, p. 20). In contrast, Adam Smith (Reference Smith1976, p. 370) reprehends Locke for stressing silver’s consensual basis of value while neglecting its value qua commodity, independent from its monetary function. Richard Cantillon ([1755] Reference Cantillon and Higgs1964, pp. 148–149) concedes that the value of metals rests on consent but argues this is true of all commodities not tied to natural needs. Yet for him, this does not make value imaginary, since all such goods incorporate land and labor and thus have an objective value. Their shared assumption is that the value of money’s stuff should be explainable like any other commodity.

Locke resists that entire framing. Silver is not a bearer of value to be explained alongside cloth or copper; it is the measure in which other things are priced and contracts secured. Under this description, the relevant problem is not why silver is valuable as a particular good among others but how a practice can render a particular material fit to serve as standard and as generally acceptable security across time and between strangers.Footnote ¹³

Second, Caffentzis’s appeal to the law of opinion risks overstating the moral register of monetary consent and thereby misinterpreting monetary confidence as moral fides. The law of opinion does share with monetary convention the features of being impersonal, tacit, and largely unwritten. Yet Locke’s account of its enforcement is explicitly interpersonal and evaluative. It rests on the standing capacity of individuals to think “well or ill, approving or disapproving of the actions of those whom they live amongst” (Locke Reference Locke and Nidditch2011, p. 353), and on the fact that “no Man scapes the Punishment of their Censure and Dislike, who offends against the Fashion and Opinion of the Company he keeps” (Locke Reference Locke and Nidditch2011, p. 357). The sanction here is reputational, since it presupposes a social gaze, a community of judgment, and the affective economy of esteem and shame. In that respect, it remains structurally adjacent to fides.

Consider the contrast. A gentleman who dresses or speaks inappropriately is punished through ridicule, contempt, and the loss of credit. But a merchant offering furniture instead of silver to his supplier as payment may be economically unqualified, although he is not sinful, or criminal, or disreputable. The sanction is not moral (shame) but practical (exclusion). His failure is judged not by reference to a moral code but by the cold logic of practical necessity. Essentially, no one is morally obliged to annex value to silver. The binding force at stake is of a different kind, namely, the necessity generated by shared expectations and the costs of deviating from a settled medium.

Locke’s emphasis on the pledge function reveals a phenomenon whose distinctive power is precisely to do without fides. The point of a common pledge is that it can circulate among strangers without requiring personal knowledge, moral judgment, or reputational enforcement. Marx captures this when he remarks that economists presuppose a faith in money as a replacement for interpersonal trust: “[I]t is clear to the economists that the existence of money presupposes the objectivation [Versachlichung] of the social bond.… Here the economists themselves say that people place in a thing (money) the faith which they do not place in each other” (Marx Reference Marx2005, p. 160; Marx and Engels Reference Marx and Engels1976, p. 93). Fides, which Locke also defined as the “social bond,” here reappears as a thing—money—capable of mediating exchange in a world where neither moral trust nor institutional guarantees are sufficient to make individual promises reliably current.

A final remark is in order concerning the limits of fiduciary power and the scholarly debate over whether Locke’s monetary doctrine “naturalizes” or “depoliticizes” money. Joyce Appleby’s (Reference Appleby1976) influential reading holds that Locke removes money from the domain of political discretion by grounding its value in the natural properties of silver. Building on and refining that line, Stefan Eich (Reference Eich2022) suggests that Locke’s invocation of consent is a veiled acknowledgment of money’s political character, hence what Locke called “‘intrinsick value’ originated, paradoxically, in fiat” (Eich Reference Eich2022, p. 52). Thus, in contrast to Appleby, Eich (Reference Eich2022, p. 71) insists that Locke’s intervention should be better read as a “political strategy to depoliticize money’s appearance.”

These interpretations correctly capture Locke’s intent of placing monetary value beyond the reach of sovereign manipulation. However, the nature/politics dichotomy that frames both accounts is inadequate to register Locke’s distinctive move. The “consent of mankind” invoked by Locke is neither a natural property nor a political act. It is, as the preceding analysis has shown, a social fact of a distinctive kind. What lies “outside” politics is not metaphysical nature but what would later be theorized as “society” or the “social”—a domain that, in the late seventeenth century, could be articulated only through the available grammar of nature (state of nature, natural order, natural sociability), since a stable conceptual third term between nature and politics was not yet fully in place.Footnote ¹⁴

Though a genealogy of the modern concept of “society” cannot be sketched here, one indicator of the overlapping of “natural” and “social” is noteworthy. Within a polity, the nature/political convention contrast seems exhaustive. What is not naturally given must be instituted by sovereign authority. But between polities, a different logic prevails. In Locke’s framework, commonwealths exist in a conceptual “state of nature” vis-à-vis one another—bound by natural law but not by any common political superior. In this interstate domain, the fiduciary power of any single sovereign reaches its structural limit. The stamp of sovereign authority, so decisive within domestic jurisdiction, dissolves at the border into the anonymous measure of quantity. Locke insists that foreigners regard English coin as “meer Bullion, valued only by its Weight” (Locke Reference Locke and Kelly1991b, p. 442). The sovereign cannot compel Dutch or Spanish merchants to accept English coin at more than its metallic worth. In this respect, Sartori (Reference Sartori2021) is correct to point out that a hermeneutical interpretation of Locke’s reduction of money to silver was an attempt to make sense of the nascent commercial capitalism and the increasing fluxes of money beyond sovereign borders.

The emphasis on the international dimension points in the opposite direction from Eich’s reading. What Locke calls intrinsic value is not fiat—a sovereign “let it be made”—but factum, a social reality already made by the coordinated practice of innumerable anonymous exchanges across political frontiers. This distinction between fiat and factum illuminates the peculiar structure of monetary confidence. Fiat implies a performative utterance of a discernible will, while factum implies something already and anonymously accomplished. Locke’s “universal consent” belongs to the order of factum since it is not commanded into being but rather discovered as already operative. It is so widespread and stable that it presents itself with the force of natural objectivity. In this light, Locke’s conception of confidence is analogous to the logic of fetishism (Bass Reference Bass2015). Value is not discovered in silver but projected onto it by a collective practice, which then confronts its participants as a natural constraint. Silver becomes valuable not because of any natural essence but because it is treated as such by all, so it exerts the same effect “as if it were natural” (Locke Reference Locke and Kelly1991a, pp. 172–173).

This circularity is not a defect but the very foundation of money’s power: Value exists because it is expected to exist, and it is expected to exist because it does. Confidence names the trust that sustains this circle—trust not in persons or in institutions but in the sheer persistence of a social fact. In articulating this structure, Locke disclosed a modality of trust that his own conceptual vocabulary could not yet name but that remains essential to any adequate understanding of money’s social foundation.