Benjamin Franklin Quotes
There is a certain proportionate Quantity of Money requisite to carry on the Trade of a Country freely and currently; More than which would be of no Advantage in Trade, and Less, if much less, exceedingly detrimental to it…. Want of Money in a Country discourages Laboring and Handicrafts Men (which are the chief Strength and Support of a People) from coming to settle in it, and induces many that were settled to leave the Country
There must be enough money in circulation so that all people who want to buy things will have a vehicle for paying for it else people would be reduced to barter and tade—a much less efficient mechanism. Note the importance that Franklin gives to being able to attract immigrants. This was considered extremely important in colonial America. Immigration was the main engine of growth and development. Many believe that it still is.
Benjamin Franklin, 1706-1790, Governor of Pennsylvania, Member of the Continental Congress & the Constitutional Convention, Governor of Pennsylvania, President of the Pennsylvania Assembly, U.S. Minister to France, Postmaster General of the American Colonies, A Modest Enquiry into the Nature and Necessity of Paper Currency, 1729
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All money has based on the Gold Standard then. But the economic output of the American colonies was increasing rapidly. If the money supply stays fixed, there is a shortage of money and this then inhibits further growth, Franklin realized this and called for an increase in the money supply. He was only 23 years old when he wrote this essay and had these insights.
Colman’s view that business failures contributing to society may be more important than the contributions of the wealthy and successful has been a common theme where failed business men make great politicians (Truman) or failed politicians are appreciated as great philosophers (Paine). This seems to be the first American argument that a failed economic enterprise can have a very beneficial short and/or long term effect on economic development. The failed business could start an entire industry which succeeds later when technology or capital becomes more readily available, or even if implemented by a better manager. Arguably, the California gold rush miners never made any significant money, but their presence changed the economic fact of California. The American airline industry has made little or no money in its history but has enabled development throughout the nation. And the dot com bubble may well have been an economic debacle of the end of the 20th century, but it spurred economic development that has benefited the entire globe.
Iceland's economy collapsed in the Meltdown of 2008. Their largest banks failed completely as they had engaged in the same kind of risky investments as the American banks had. Their government however did not have the assets to bail their banks out. So they let the banks fail and protected the small depositors with their limited assets. They then devalued their currency drastically, making their fishing and other products a great bargain for other nations of the world and though humiliated the Islanders started getting jobs as demand for Islandic exports grew. Some Icelanders who owned companies were making a great deal of money. Taxes were raised for high income citizens. To prevent the money being taken out of the country and invested so that the jobs would not benefit Icelanders or the earnings were not as taxable in Iceland, the nation imposed Capital Controls—no money was allowed to be taken out of the country except small amounts for business travel expenses. Iceland recovered rapidly and by 2015, at which point the Minister of Finance felt that the country was losing more than it was gaining, so it was time to end the Capital Controls.
There has always been a fear of inflation and currency debasement by governments. Since ancient times, rulers issued coins and when they were made of cheap metals like copper or iron, the ruler could mint as much as he wanted and when he did so the value went down. By using only precious metals, gold and silver, for coins, there would be a natural restraint on government. Garfield was one of those who believed that we should always have money of gold and silver. The United States would use that principle for the next century even backing its paper money with gold and silver. In the Nixon administration the United States abandoned the gold standard. Today, it is the ability of a country to produce things that maintains value of paper money which has been supplanted in many cases by electronic money.
Benjamin Franklin FRS FRSA FRSE was one of the Founding Fathers of the United States. A polymath, he was a leading writer, printer, political philosopher, politician, Freemason, postmaster, scientist, inventor, humorist, civic activist, statesman, and diplomat. As a scientist, he was a major figure in the American Enlightenment and the history of physics for his discoveries and theories regarding electricity. As an inventor, he is known for the lightning rod, bifocals, and the Franklin stove, among other inventions. He founded many civic organizations, including the Library Company, Philadelphia's first fire department, and the University of Pennsylvania.
