Briefly introduced by the three editors, twelve papers study the link between money standards and political spaces in a 3,000-year survey beginning with the oldest Mediterranean coinage and continuing up to the European Monetary System (EMS). Published in 2007, the papers were read at a conference organised in 2001 by the National Bank of Greece. The first nine contributions are strictly historical; by contrast, in the next two papers Michael Artis writes about the European Monetary System and Paul de Grauwe discusses the European Monetary Union. Vitor Gaspar's concluding remarks illustrate a large dose of uncertainty and scepticism about the working of the EMU.
The first papers survey three epochs of ancient Mediterranean coinage and specie circulation: Greece, the Roman Empire and the Byzantine Empire. Touratsoglou offers a descriptive account of the expansion of eastern Mediterranean issues from Aegina up to the Hellenistic kingdoms. In a domain much investigated but with many blank spots, he stays short of providing us with clues on problems pending. Martinez Oliva analyses the relations between the currency problems and the outstanding events within the political economy of the Roman Empire. The conclusion is a compendium of the consequences of the crisis: the disappearance of the money-lending professions, general instability in prices and interest rates announcing the economic rupture of the Roman world. The monetary evolution of the Byzantine Empire is the core of Morrisson's paper, one of the most interesting, with an analysis of the adaptation of the Diocletian reforms and of the increasing regionalisation after the failure of the Justinian reconquista. The examination of the successive creeping debasements during the prosperous tenth and eleventh centuries, the consequences of the Muslim and Turkish conquest, enable the non-specialist to appreciate the importance of the Byzantine monetary system as a major element in its fight for survival in a world ever more hostile.
The following three contributions introduce the reader to nineteenth-century monetary history. The first one, by Richard Tilly, is a well-structured synthesis of the combination which gave birth to the German gold mark. Even if the events are well known, the monetary laws of 1821, 1837 and 1838 fixing the rate of exchange between the Prussian thaler and the gulder, and the role of the Reichsbank in the process of the Reich's monetary integration are clear reminders. It is useful to recall that German monetary unification was almost realised before 1871, contrary to the opinion of Eichengreen and Flandreau, and that bimetallism was not condemned since contemporaries could not anticipate the future of silver and gold production. The consequences of the French defeat are well sifted. But was the watershed of silver predictable in 1868?
Marcello de Cecco offers what he calls ‘revisiting’ the Latin Monetary Union (LMU), thus indicating that he is not undertaking a revision of the main current of thought. Nevertheless, we are presented with a discussion about the Ancien Régime monetary system, considered as the time of the monnaie de compte, as well as a summary of events from Newton's choice of the gold standard for Britain to its generalisation on the eve of the Great War. A second part overshoots the French monetary system after the Revolution, affirming that the French chose to ‘flout’ Locke's law, and discusses the unification of the Italian currency, seemingly in order to link both systems on the eve of the LMU. Based on Lucas Einaudi's book, the critical approach to the LMU is interesting. However, this is marred by putting in the same category Belgium, the fifth industrial nation of the world, and Switzerland, still a modest economy without a central bank until 1907. What is interesting here is the treatment of the LMU's impact on the Italian economy over time and the examination of the costly French–Italian economic war. Certainly the French indemnity was a major help in establishing the gold mark. But had the German currency unification, decided before the war, any other choice in the 1870s? Another statement about France and Germany exchanging their foreign loans gives a distorted image, since the French liquidation of Spanish debt holdings was much more important than its Italian assets, and Germany was openly hostile regarding the French financing of Russian development. Why France spent so long trying to keep an LMU alive is a real problem. Unfortunately, De Cecco's paper offers few clues in this direction.
Based upon his own publications, Jonung's contribution is an interesting explanation of the working of a monetary union without central bank coordination and common currency. The three currencies had a total gold convertibility and, although never setting up a free-trade zone, they had a close level of economic development. The system was too weak to be more than a convenient instrument without any long-term economic results. Once gold convertibility was abandoned, the Pandora's box of economic divergence was opened and the LMU suspended in 1916; it was dissolved in 1924.
Pablo Martin Aceña's chapter is a global analysis of the gold standard. This is a well-informed and well-illustrated analysis of the forces behind the general move towards the gold standard and the reasons for adopting it. However, the demonstration is limited by a commitment to Eichengreen's debatable exposition of the origin of the gold mark, and Martin Aceña supports the statistically unproven and controversial relationship between foreign investment in developing countries and adhesion to the gold standard.
The last four papers concentrate on two landmarks of the twentieth century: the IMF and the EMU. Filippo Cesareo's paper is made up of two parts: first a long, well-informed survey of the gold exchange standard, with a good synthesis of Hayek, Hawtrey and Keynes, and an inevitable reference to Friedman, followed by an analysis of the Bretton Woods agreements with adequate consideration given to the built-in contradiction between the rules of the IMF and the national economic policies. Nonetheless, the paper allows too much space to the pre-1940 period, and what could have been an interesting opening leads to a short last paragraph.
Michael Artis discusses the EMS in a most informative way. The links between the crisis of the Bretton Woods system and the strengthening of the DM are well expounded, as is the link between the 1992 crisis and the tightening of the European exchange rates. But one remains sceptical about Artis's analysis of Maastricht and its consequences. He leans in favour of the EMS but his reasons are unsatisfactory. This may be due to a bibliography ignoring not only French and German but also OECD publications. Paul de Grauwe brings forward the forces pushing towards a common currency as the desire of France and Italy to wrestle monetary hegemony from Germany and Helmut Kohl's determination to realise the European Union, as he believes that collective gains will transcend the decline of German monetary hegemony. De Grauwe's opinion is debatable since the euro has been built on the DM model. In a second part, de Grauwe expounds and minimises the risk of strong centrifugal forces working inside the EU given the different rates of growth among its members, as opposed to the advantages of risk-sharing.
In his concluding paper, Vitor Gaspar concentrates most of his remarks on the last part of the book. He tries to disentangle the skein of half-hearted decisions which led to the EMU. The control of inflation, the stability of financial markets and the growth of intra-union trade are testimonies to a well-born child of the western European nations. In this respect, all the papers are testimonies to the benefits of stable currencies.
As happens with many conferences, this very useful publication suffers from a patent lack of homogeneity. Contributions are unequal in size, content and meaning. Still, its main limits relate to the lack of French and German sources, with the exception of Tilly's analysis of German monetary unification. Except for some insights, the inner debates in France, Germany, Italy and others are strictly limited to English-language works. From this point of view the book constitutes a lost opportunity. But it may serve as an incentive for future publications based on wider international cooperation.
