384-322 B.C.

Aristotle writes Politics and Ethics, his two main works containing his economic analyses and principles. He viewed economic issues as moral issues.

Antiquity thru the late 17th century

From the time of Plato and Aristotle (reappearing in earnest after the Enlightenment began in Eurasia), political philsophers examined the relationship between individuals, between the individual and groups and between the individual and society.

800 on

Eurasia, in whole or in parts, organizes into small principalities (the Manoral system and, later, Feudalism.

1250-1274

Thomas Aquinas, canonized in 1323, writes Summa contra gentiles and Summa theologica, attempting to synthesize Christian and Aristotelian philosophy.

1450 on

Beginning of the Age of Discovery and the extraction of gold and silver form the New World. Between 1560-1630 the influx of precious metals contributed to a four-fold incrase in the price of grian, cattle, timber, wood, etc.

1493

The first quantities of precious metals arrive in Spain from the New World. Spanish nobility uses this treasure to buy manufactures and luxury goods, as well as to pay for Spain's religious wars against the Moors and Protestants. Then, when drought hits Spain, they begin to purchase grain and other foodstuffs. Prices throughout Europe rose in response to the expanded coinage (500 percent in spain and Portugal, less elsewhere, during the sixteenth century).

1512

Niccolo Machiavelli's book, The Prince, is published, as a manual on how to obtain and hold power.

1558

Thomas Gresham, founder of the Royal Exchange in London, observes that "Bad money drives out good." The becomes known as Gresham's Law.

1560s

Thomas Gresham, an English banker and merchant, became financial adviser to Queen Elizabeth I. His observation that "bad money drives out good" becomes known as "Gresham's Law."

1600 - 1760

Dutch, French and British merchants initiated the system of Mercantilism between domestic producers of finished goods and New World settlements. Britain's colonies, in particular, grew in population and wealth production under what historian Charles Andrews later called a century and a half of salutary neglect.

1609

Bank of Amsterdam established in Holland. The bank was authorized to take in coinage from all over and (after charging a fee) re-mint the coinage with a standard weight of gold and silver content. The Bank then established a credit for the depositor, which could be circulated as a fully redeemable bank note. During this early period of its history, the Bank became the first international bank of deposit rather than a lending institution.

1615

Antoine de Montchretien's book, Treatise on Political Economy, is published in France. He argues against trade with foreigners on the grounds that foreign goods and foreign ideas will corrupt the French way of life.

1630

Thomas Mun's book, England's Treasure by Foreign Trade, is published. Mun, an official of the East India Company, argues against the government's prohibition against the export of bullion.

1662

William Petty's book, Treatise of Taxes and Contributions, is published in England. This was one of the first attempts to use scientific investigation rather than intuition (i.e., revealed truth) to support contentions about the effects of taxes on production and commerce.

1690

John Lock's book, Two Treatises Of Government, is published. Locke states emphatically that people are born free and come together into society in order to improve their condition. Thus, government is a creation of society and has as its primary responsibility the protection of individual liberties against acts of license (e.g., criminal behavior and monopolies).

1694

The Bank of England is established.

169-

England adopts silver as its coinage of choice, establishing the so-called "sterling standard" which lasts until 1816.

1705

Hohn Law's tract, Money and Trade Considered, with a Proposal for Supplying the Nation with Money, is published. Law advances a mercantilist view, with the substitution of paper money for specie, secured by the value of the nation's land.

1716

John Law, a Scot of less than impeccible credentials, convinced the French to establish a new bank, the notes of which were ostensibly to be backed by conage with a fixed content of gold and silver. Law then used the deposits to fund a monopolistic trading company and engage in land speculation in North America. Enormous quantities of stock were issued, the proceeds of which went not to development but as loans to the French government. In 1720 confidence disappeared, there was a run on the bank, which closed, and Law escaped to Italy.

1720

South Sea Company is organized in England, which takes over the debt ofthe English crown in return for monopoly privileges over trade with the Spanish colonies. Speculation developed in the stock, which eventually crashed, resulting in large losses for those last involved.

1729

Benjamin Franklin's essay, A Modest Inquiry into the Nature and Necessity of Paper Currency, is published.

1730

Richard Cantillon's essay, "The Nature of Commerce," is published in 1775 in French. Cantillon sees land as the source of wealth and labor as the active agent in the creation of wealth. Although a proponent of mercantilism, Cantillon acknowledges the need to foster entrepreneurship and risk-taking.

1748

Charles-Louis de Secondat's book, The Spirit of the Laws, is published. Secondat, better known by his title, the Baron de Montesquieu, was one of the first political philosophers to expound the doctrine of separation of powers. His view is, however, relativistic. He writes that: "Liberty is a right of doing whatever the laws permit." He assumes that if those in power adopt laws, those laws must inherently be just.

1755

Richard Candillon's book, Essay on the Nature of Commerce, is published in England (although written during the 1720s). Cantillon's contributions to the science of political economy ncluded his call for writers to define their terms. He was one of the first to distinguish land as "the source of material from which wealth is extracted" and not wealth itself. Cantillon also introduced the idea of the price mechanism as a market clearing device, attempting to show that supply/demand relationships were self-regulating. He is arguably the more appropriate choice as the father of political economy than is Adam Smith.

1758

Francois Quesnay's book, Tableau economique, is published. He completes this work in an effort to explain to the King of France the circulation of goods and money in a free and competitive economy.

1758

Francois Quesnay's book, Tableau Economique, is published in France, advocating the renewal of mercantilist restrictions over trade and the use of tax revenue (collected only form the annual net profit attributable to land ownership) for developing the nation's physical and societal infrastructure.

1763

Victor Riquetti's book, La Philosophie rurale, is published. Riquetti, holding the title of the Marquis de Mirabeau, is one of the leading physiocrats in France. This book sets out in full detail the physiocratic doctrine.

1766

William Pitt, Prime Minister of England, on indirect taxation: "There is a method by which you can tax the last rag from the back, and the last bite from the mouth, without causing a murmur against high taxes, and that is, to tax a great many articles of daily use and necessity so indirectly that the people will pay them and not know it. Their grumbling will then be of hard times, but they will not know that the hard times are caused by taxation."

1766

Anne Robert Jacques Turgot's book, Reflections On The Formation And Distribution of Wealth, is published in France. Turgot examines the proces by which land comes to have an exchange value following the enclosure of the commons and issuance of private titles to land. In the 1770's, Turgot was instrumental as the French Minister of Finance of stabilizing prices (by freeing trade). After proposing radical reforms in aristocratic prvilege, tax relief to the peasants, elimination of trade guilds and the creation of local and regional assemblies, he was removed from office.

1768

Pierre Samuel Du Pont de Nemours' essay, Physiocratie, is published in France. This essay argued that agriculture was the most important economic activity. The French school of political economists, known as Physiocrats, had a material influence on the thinking of Benjamin Franklin, Thomas Paine and Thomas Jefferson.

1768

Pierre Samuel Dupont de Nemours book, La Physiocratie, is published. Dupont de Nemours, who was a close collaborator with Turgot and Quesnay, later fled to North America to escape execution by the Jacobin leaders in France.

1776

John Adams (in a response to the English philosopher James Harrington), writes: "Harrington has shown that power always follows property. This I believe to be as infallible a maxim in politics, as that action and reaction are equal, in mechanics." He goes on to suggest that liberty can be preserved only by making "the acquisition of land easy to every member of society."

1776

Adam Smith's book, The Wealth of Nations, is published. Smith writes: "Civil government, so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all." Smith's use of the French term, laissez-faire, is interpreted by merchants, agribusiness owners and industrialists to mean that government ought not interfere with private business relations. The full French term was laissez-faire, laissez-aller (roughly translated as "a fair field with no favors"). Smith is considered the father of modern political economy.

1776

Jeremy Bentham's book, A Fragment on Government, is published.

1776-1792

The Spanish milled dollar was the stated money for which paper currency issued by the Continental Congress could be redeemed. Overissuance and British counterfeiting drove the exchange rate (i.e., the discount) to as high as 1,000 Continentals to the Spanish dollar.

1778

Thomas Jefferson introduces a bill in the Virginia legislature to eliminate the remnants of aristocratic privilege in land ownership -- ential and primogeniture.

1779

Benjamin Franklin writes of the paper currency with great sarcasm: "This currency, as we manage it, is a wonderful machine. It performs its Office when we issue it; it pays and clothes Troops, and provides Victuals and Ammunition; and when we are obliged to issue a Quantity excessive, it pays itself off by Depreciation."

1780

Edmund Burke's book, Plan for Economic Reform, is published.

1782

William Ogilvie's essay, "On the Right of Property in Land" is published. He advocates reform of the land tenure system then existing in Britain.

1783

William Pitt, the younger, becomes Prime Minister of Britain and begins to dismantle mercantilism, incorporating the ideas of Adam Smith and lifting restrictions on trade and investment. War with France left Britain with a national debt of 40 million pounds. Holders of Britain's paper currency lined up at the Bank of England to turn in their paper for gold. Combined with new taxes, the effect was to drive up prices and cause food shortages.

1786

Thomas Paine's pamphlet, "Dissertation on Government; the Affairs of the Bank; and Paper Money," is published. At the end of the year, Paine leaves North America for France, where he hoped to find investors for his new iron bridge design.

1789

Jeremy Bentham's book, An Introduction to the Principles of Morals and Legislation, is published. Bentham seeks to utilize utilitarian analysis to develop public and private policies that result in the "the greatest good for the greatest number."

1789

Thomas Malthus's Essay On The Principle of Population is published in England. Mathus linked the control of population growth to increasing poverty and called for a new commitment to moral responsibility to curtail population growth.

1789

Jeremy Bentham's book, Principles of Morals and Legislation,, is published in England. Influenced by David Hume, Bentham becomes the philosopher of Utilitarianism, (i.e., human beings act consistently to maximize pleasure and minimize pain). He also argued that forms of government ought to be judged on performance and obedience to government was required only if government was useful.

1790

Thomas Jefferson develops a "Plan for Establishing Uniformity in the Coinage, Weights, and Measures of the United States."

1791

Thomas Paine's book, The Rights Of Man, is published in England. Paine urged reformers in the Old World to look to the American experiment for guidance in achieving "government founded on a moral theory."

1791

Thomas Jefferson warns George Washington that the level of taxation required merely to maintain the interest payments on the national debt threatened to cause "a drain of coin" estimated at some "three millions of dollars annually."

1791

Alexander Hamilton is instrumental in getting the U.S. Congress to charter the first Bank of the United States, with the power to issue notes redeemable in coined money or bullion.

1792

The U.S. dollar is established as 371.25 grains of pure silver (which was the average silver content of coins circulating in the U.S. at the time. The new coins also had a 15:1 ratio of silver to gold (the approximate market rate of exchange between silver and gold).

1794

Marie Jean Antoine Nicolas de Caritat (the Marquis de Condorcet) writes his philosophical work, Esquisse d'un tableau historique des progres de l'esprit humain. He believes the natural evolution of humanity will bring about an absolute equality of rights.

1796

Thomas Paine's pamphlet, Agrarian Justice, is published. He argues that every owner of land must pay a "ground rent" for the privilege of controlling land.

1798

Thomas Robert Malthus' book, Essay on the Principle of Population as It Affects the Future Improvement of Society, is published anonymously.

1802

Geor Wilhelm Friedrich Hegal calls for unification of the German states into one nation.

1814

The Hartford Convention is held, where disenchanted Federalists met to promote secession by the New England states from the U.S. (and then seek a separate peace with Britain).

1816

The U.S. Congress (at the urging of James Madison) passes a general tariff against imports and grants a charter to the second Bank of the United States.

1816

The second Bank of the United States is chartered. In 1823, Nicholas biddle comes in to head the Bank and oversee its expansion. Biddle kept a close watch over the state banks and their ability to redeem notes in gold and silver. This brought him into conflict with state-chartered banks (and their political friends) on the frontier, where specie was scarce. With the election of Andrew Jackson as President, the Bank's charter was not renewed in 1836.

1816

Robert Owen's pamphlet, New View of Society, is published. He believed strongly that environment could be modified to change and improve individual behavior.

1817

David Ricardo's book, The Principles of Political Economy, is published in England. Ricardo is credited with improving on Adam Smith's work by more scientifically explaining the law of rent and the law of wages. Ricardo, as with Smith, makes no firm moral argument regarding wealth distribution. He merely describes the process by which this occurs. He writes: "Independently of ... improvements, in wich the community have an immediate and the landlords a remote interest, the interest of the landlord is always opposed to that of the consumer and manufacturer."

1817

David Ricardo's book, On the Principles of Political Economy, is published. Ricardo writes about money: "Experience shows that neither a state nor a bank ever has had the unrestricted power of issuing money without abusing that power; in all states, therefore, the issue of paper money ought to be under some check and control; and none seems so proper for that purpose as that of subjecting the issuers of paper money to the obligation of paying their notes either in gold coin or bullion."

1819

The Bank of Amsterdam fails, due to losses generated by loans to the Dutch government and commercial interests.

1820

British economist Alfred Marshall's book, Principles of Economics, is published.

1820

William Godwin's book, On Population, is published as a response to Reverend Malthus.

1820

Robert Owen comes from Britain to the United States to found an experimental community in the state of Indiana called New Harmony.

1821

James Mill's book, Elements of Political Economy, is published.

1827

Frederick List, leader of German nationalism, opens an attack on the free trade ideas of Adam Smith. His lectures are published under the title Outline of American Political Economy. He champions what was becoming known as "the American System," which protected domestic industries with tariffs and limits on imports, used Federal power to develop the nation's physical infrastructure, and instituted a national banking system to provide credit to government. List also advocated the creation of a European confederation that would permit free trade within the member states.

1834

The gold content of the U.S. "Eagle" was decreased to 232 grains of gold, which increased the price of silver in terms of gold and brought gold coins back to the U.s. during the 1840s and 1850s.

1835

Alexis de Tocqueville's Democracy in America is published. A second volume appears several years later.

1836

the U.S. Congress passes legislation introduced by Henry Clay authorizing a revenue sharing with the states based on a $35 million surplus generated from the sale of public lands and tariff revenues collected. Another law required that all purchases of public lands be paid for with specie (i.e., gold or silver coinage) and not bank notes.

1837

Charles Francis Adams' book, Reflections Upon the Present State of the Currency in the U.S., is published.

1837-1840

Henry C. Carey's three-volume work, Principles of Political Economy, is published in the U.S. Carey argues that economic growth will overcome any problems of wealth distribution by ensuring the demand for labor is always greater than the supply.

1838

Jerome Adolphe Blanqui's book, The History of Political Economy, is published. Blanqui argues the case that government power must be invoked to protect workers from exploitation.

1840

Pierre-Joseph Proudhon's book, What Is Property?, is published in France. Proudhon is the architect of Mutualism, which would replace the system of finance capitalism (i.e., what is more properly identified by the term industrial landlordism) with worker cooperatives.

1840s

Richard Cobden is elected to the British Parliament as an advocate for free trade.

1841

Frederick List's book, National System of Political Economy, is published in Germany. List and others use their knowledge of political economy to assist in building a modern military-industrial complex within the German state.

1843

Thomas Caryle's book, Past and Present, is published. Carlyle opposed Smith's advocacy of laissez-faire and described politcal economy as the "dismal science."

1845

Claude-Frederic Bastiat's book, Sophismes economiques, is published. He argues against protectionism and socialism, and also challenges Malthus' view on the problems caused by population.

1848

Karl Marx comes to England for a meeting of the Communist League, where he teams with Frederick Engels to write The Communist Manifesto.

1852

John Stuart Mill becomes one of the first political economists to suggest paper currency could be an efficient and appropriate substitute for coinage and certificates of deposit, so long as the quantity in circulation corresponded to the production of goods and services. This is roughly what economists such as Milton Friedman later suggested be adopted as a so-called "monetary rule." In his book, Principles of Political Economy, Mill writes: "The value or purchasing power of money depends, in the first instance, on demand and supply. ...The supply of money ... is all the money in circulation at the time. ...The demand for money, again, consists of all the goods offered for sale."

1854

The book, Elements of Political Science by Patrick Edwrad Dove, is published. Dove, attacks the system of landlordism and calls for a single tax on land to solve the economic problems created by landlordism.

1856

Francis Bowen's book, The Principles of Political Economy, is published in the U.S. This book expresses the view that the laws of political economy developed by Ricardo, et al. did not apply to the U.S. because of its expansive natural bounty.

1858

Karl Marx completes his Critique of Political Economy, which is read by hardly anyone outside the community movement during his lifetime.

1860

Walter Bagehot is appointed editor of the London newspaper, the Economist. Bagehot is in general agreement with Ricardo's perspectives. He writes with an historical perspective and expresses conditional acceptance of the arguments for laissez-faire competition.

1860

Richard Cobden, a Member of the British Parliament, supports a Treaty to reduce tariffs between Britain and France. He had joined with John Bright to form the Manchester Anti-Corn Law Association and to fight for free trade.

1861

Henry James Sumner Maine's book, ancient Law, is published. This book is a study of comparative law that revealed how ancient ideas continued to influence modern thought and were integral to the laws then in effect.

1863

John Stuart Mill's book, Utilitarianism, is published. He has become one of the leaders of this school of thought.

1867

Karl Marx completes the manuscript for the first volume of Das Kapital. A small edition of 1,000 copies is published in Germany.

1869

Charles Franklin Dunbar becomes professor of political economy at Harvard University. after two years of study in Europe, Dunbar begins to train a new generation in the science of economics. This is the beginning of the university-trained economist.

1871

William Stanley Jevons' book, The Theory of Political Economy, is published in England. Jevons is one of the pioneers of neo-classical economics and a proponent of the theory of marginal utility.

1873

A Coinage Act passed by the U.S. Congress contains no provision for the minting of the silver dollar. Subsequent legislatoin gave to the U.S. Mint the sole authority to issue coinage, bringing an end to "free coinage."

1876

The German Reichsbank is established as the central bank of a unified German state. This is accomplished virtually without discussion after several years of financial panic.

1879

Frank W. Taussig graduates from Harvard University, then goes on to study economics at the University of Berlin. He specializes in the effects of tariffs and protectionism on international trade.

1879

Henry George's book, Progress and Poverty, is published in the U.S. George identifies monopoly -- and land monopoly in particular -- as the primary cause of industrial depressions. He calls for the removal of all taxese on labor and capital, replacing them with a tax that collects the annual rental value of land (as broadly defined).

late 1800s

In 1937, economist Wilhelm Roepke makes the following observation regarding structural changes adopted in the last portion of the 19th century: "The close of the 19th century brought the beginnings of a real international monetary homogeneity paralleling that existing on the national level, thanks to the gold standard which united all countries within the framework of one monetary system."

late 1800s

In A History of Interest Rates, written by Sidney Homer and published in 1963, he writes: "Nineteenth-century Ministers of Finance or chancellors of th Exchequer thought of the burden of their national debts in terms of the annual interest charge against the revenues rather than in terms of a principal amount which must be repaid. Principal repayment only occurred when it was considered a benefit to the state. Refundings wre almost always conversions at lower rates."

1883

Henry George's book, Social Problems, is published. George argues that the issuance of money (i.e., coinage) is the appropriate business of government. Banking, he argues, ought to be private and limited to "the safekeeping and loaning of money, and the making and exchange of credits."

1883

Yale University professor of sociology and economics William Graham Sumner's book, What Social Classes Owe to Each Other, is published. Sumner condemned socialism and most state interference in economic affairs.

1884

Frederick Engels completes the second volume of Marx's Das Kapital following Marx's death in 1883.

1884

Eugen von Bohm-Bawerk's book,Capital and Interest, is published in Germany and translated into English in 1890. Bohm-Bawerk serves as finance minister in the Austrian government and champions tax reform.

1884

Friedrich Engels' book, The Origin of the Family, of Private Property and of the State, is published.

1884

German reformer Michael Flurscheim's book, Auf friedlichem Wege is published. Flurscheim was a strong proponent of the public collection of location rent as advanced by Henry George. He advocated that government have the right to purchase land at a price that would remain stable, and then lease the land in order to collect its location rent.

1885

John Bates Clark's book, The Philosophy of Wealth, is published. He stressed the relation between ethics and economics, advocating cooperative institutions.

1886

Simon Newcomb's book, Principles of Political Economy, is published. Newcomb, a professor of mathematics at the U.S. Naval Academy, a strong proponent of free markets and sound currency.

1888

Richard Ely's book, Problems Of To-Day, is published in the U.S. Ely was by this time a tenured professor of political economy at Johns Hopkins University. As was the case with many others whose positions were privately funded (often by industrial, banking or real estate interests) he attempted to justify monopolistic arrangements on the basis that they were embedded in the system as traditional practics.

1893

John R. Commons' book, The Distribution of Wealth, is published. Early in his life he had joined Henry George's campaign for a single tax on location rent. He became a strong proponent of an ongoing role for government to mitgate economic and social problems.

1894

Friedrich Engels completes editing of the third volume of Karl Marx's Das Kapital.

1896

Herbert Davenport's book, Outlines of Economic Theory, is published prior to earning a Ph.D. at the University of Chicago. Davenport believed the study of economics should not concern itself with ethical matters.

1897

Henry George's book, The Science of Political Economy, is published in the U.S., posthumously.

1899

John Bates Clark's book, The Distribution of Wealth, is pubished. Clark made use of marginal utility analysis in this work. He also argued that workers should receive all or most of the value they added to production.

1899

Vladimir Ilyich (Ulyanov) Lenin's book, The Development of Capitalism in Russia, is pubished. Lenin declares that non-Marxist economists are unable to understand the basic problems of societies.

1900

Britain's national debt stands at 639 million pounds. This figure represents a decline from earlier in the century.

1900

Scottish industrialist and professor William Smart's book, Taxation of Land Value and the Single Tax, is published.

1901

Max Hirsch's book, Democracy Versus Socialism, is published in England. Hirsch is a free trade proponent and leading supporter of Henry George's campaign for the societal collection of location rent.

1902

Peter Kropotkin's book, Mutual Aid, a Factor in Evolution, is published. Kropotkin believes the state is the enemy of the people and should be replaced by cooperative organizations.

1903

William James Ashley's book, The Tariff Problem is published. Ashley also authored an Introduction to English Economic History and Theory in two volumes, published in 1888 and 1893.

1907

Panic and depression spread across the United States. Nearly 250 banks fail. This set the stage for creation of the Federal Reserve System.

early 1900s

Historian Carroll quigly writes in Tragedy and Hope, published in 1966, that the world's dynastic bankers were pursuing "nothing less than to create a world system of financial control in private hands to dominate the political system of each country and the economy of the world as a whole."

early 1900s

In Britain, the Round Table groups were formed as first step to, as described by Lord Milner (a British Secretary of State for War), "seek to federate the English-speaking world along lilnes laid down by Cecil Rhodes..." who funded the project. This effort included Thomas W. Lamont, head of the House of Morgan in the U.S.

early 1900s

The Council on Foreign Relations is organized in the U.S. Edward Gay, an economic historian and founding member, wrote: "When I think of the British Empire as our inheritance I think simply of the natural right of succession. That ultimate succession is inevitable."

1909

The book, The Essential Reform: Land Values Taxation In Theory & Practice, by British writers C.H. Chomley and R.L. Outhwaite, is published in London. The book restates the extensive moral and economic case for public collection of the rental value of locations.

1911

Edward Bernstein's book, Evolutionary Socialism, is published in Germany and translated into English. Bernstein points to mistakes made by Marx, particularly regarding the collapse of capitalism. He is an advocate of the use of political democracy to achieve constructive change.

1911

Frank W. Taussign's book, Principles of Economics, is published in the U.S. Taussig accepts the limited role of the economist, writing: "Complex political and social questions present themselves, quite beyond the scope of a book on economics." No longer, in his view, is the role of the economist to challenge socio-political arrangements and institutions based on their impact on the just distribution of wealth. This, he argues, is a political problem. Taussig, along with John Bates Clark and Herbert Davenport, are instrumental in discarding the three factor model (land, labor and capital) of political economy, substituting a two-factor model that treats land as just another form of capital.

1911

Irving Fisher's book, The Rate of Interest: Its Nature, Determination and Relation to Credit, Interest and Crises, is published. This book is co-written with Harry Gunnison Brown.

between 1885-1913

Something like 70-80 percent of all money in circulation consisted of coinage with specified gold and silver content.

1913

The Federal Reserve Act is passed in the U.S. This act creates a system of privately-owned banks to act as lenders of last resort to banks in neeed of cash to meet depositor demands. The Federal Reserve also becomes a clearinghouse for checks issued against member banks. Member banks deposit 6% of their capital with the Federal Reserve and are required to maintain reserves against deposits (in gold or gold certificates issued for gold deposited in the U.S. Treasury), or currencies then in circulation. The Federal Reserve was also authorized to issue its own notes in return for deposits of gold, gold certificates or other currencies. Only a 40 percent reserve requirement was established (in gold or gold certificates).

1913

Charles A. Beard's book, An Economic Interpretation of the Constitution of the United States, is published. Beard comes under heavy criticism by challenging the motives of some of the "founding fathers" and detailing the fact that those who made the new government were perhaps more concerned with preserving their economic positions than in creating a truly democratic republic and conditions for equality of opportunity.

1913

Rosa Luxemburg's book, Die Akkumulation des Kapitals, is published. She argued that the survival of capitalism depended on a continuous expansion of markets.

1914

With the outbreak of the First World War, Britain, France, Germany and Austria suspend specie (i.e., gold) payments. Thereafter, gold coins (consistent with Gresham's Law) were drawn out of circulation and hoarded.

1914

Oxford educated economists John A. Hobson's book, Work and Wealth, is published. Hobson develops an underconsumption theory of business cycles and a solution to poverty of taxing all surpluses away (not merely the taxation of location rent as proposed by Henry George).

1914

Louis Brandeis wrote a series of articles for Harpers Weekly attacking the U.S. nation's entrenched financiers as a "financial oligarchy."

1914-1917

The gold stock of the U.s. doubled as a result of sales of goods (and corporate shares of stock) to European governments and investors. John Kenneth Galbraith later wrote, in Money: "The U.S. faced an inflation caused by gold." Wholesale prices in the U.S. doubled during the same period.

1917

Harry Gunnison Brown, who studied under Irving Fisher at Yale University, begins a long career defending political economy against the rise of the more resrictive theoretical framework of economics. He is a firm supporter of the analysis presented by Henry George.

1919

Thorstein Veblen's essay, "The Preconceptions of hte Classical Economists" is published in the U.S. Veblen attacks existing socio-political arrangements and institutions as organized to preserve privilege and monopoly.

1920

John Maynard Keynes' book, The Economic Consequences of the Peace is published. Keynes warns against trying to return to the gold standard at pre-1914 parities becuase of gold's unstable price.

1922

An International Economic Conference is held at Genoa, Italy to discuss reinstituting a system of fixed exchange rates between national currencies and a reutnr to a gold exchange standard. The U.s. dollar and British pound are established as reserve currencies in lieu of having to deliver gold bullion to settle accounts.

1922

Philosopher John Dewey's book, Human Nature and Conduct, is published. Among other influences on Dewey's thinking, he largely accepts the system of political economy of Henry George.

1923

Germany returns to a commodity-backed currency (the Rentenmark). This, along with other fiscal reforms restore a balanced budget and tame inflation. (See the study performed by economist Thomas Sargent of the National Bureau of Economic Research.)

1924

Between 1890-1924 consolidation of English banking interests reduce the number of joint-stock banks from 104 to 18 -- five of which held 84% of all deposits.

1925

Harry Gunnison Brown's book, Economic Science and the Common Welfare, is published in the U.S. Brown is now professor of political economy at the University of Missouri.

1925

Winston Churchill, as Britain's Chancellor of the Exchequer, restores Britain to the gold standard, causing a rush by holders of sterling to convert currency into gold at the artificially low exchange rate. Britain finally ends convertibility in 1931.

1925

The U.S. and Britain agree to reset the price of gold at $20.67 an ounce and restore the "gold standard."

1928

Economist Irving Fisher's book, The Money Illusion, is published. Fisher joins with other economists to form the Stable Money League and calls for reformof the existing gold standard system, which failed to stabilize the purchasing power of component currencies. Fisher's proposal is to define the dollar not in terms of a weight of gold but to devalue or revalue the gold weight of the dollar to offset movements in a broad price index that included most basic commodities.

1928

Swedish economist Gustav Cassel testifies before a U.s. House of Representatives Committee on Banking and Currency, urging the U.S. government to limit speculation on the New York Stock Exchange, but without increasing the Federal Reserve's bank rate. If this does not take place, he predicts, there will be a rapid increase in prices followed by a serious depression.

1928

George Bernard Shaw's book, The Intelligent Woman's Guide to Socialism and Capitalism, is published.

1929

At the end of October, the U.S. stock market crashes.

1929

Swedish economist Gunnar Myrdal's book, The Political Element in the Development of Economic Theory, is published.

1929-1933

The supply of the U.S. currency in circulation falls by over a third, and one-fifth of all all commercial banks (holding 10% of all deposits) collapse.

1930

The Hawley-Smoot Tariff Act is passed in the United State.

1930-1933

Country after country erects stiff trade barriers. The contraction of trade contributes to the deepening global depression. Only France and Belgium permit their currencies to fall against the British pound during the 1920s. Thus, during the early stages of the depression, their exports become cheap in terms of foreign currencies, which keeps their economies going longer.

1931-1933

3,700 banks fail and close their doors in the United States.

1932

the Federal Home Bank System is created in the U.S. Its member banks are chartered to make loans to savings institutions and others engaged in residential mortgage lending.

1932

Swedish economist Karl Gustav Cassel's book, The Crises in the World's Monetary System, is published. In 1928 he had testified before the U.S. House of Representatives on the monetary problems of the post-First World War era.

1932

Franklin Roosevelt takes the U.S. off the gold exchange standard.

1932

In his book, The Economic Basis of Tax Reform, economist Harry Gunnison Brown argues that the most efficient and fair system of taxation is that which captures unearned income and gains. He classifies land rent for gains on the sale of natural resource-laden and agricultural lands, aw well as building sites) as the major sources of unearned income.

1933

Harry Gunnison Brown, in an article appearing in the Beta Gamma Sigma Exchange, urges abandonment of the gold exchange system, writing: "It would be better to stabilize the general price level by open market purchases and sales of eligible securities as well as goods and not be dependent upon any ned to interfere with the importation and exportation of gold."

1933

the Banking Act passed in the U.s. declares all coins and currency of the U.S. to be the only forms of legal tender.

1934

The U.S. National Housing Act is passed in the U.S., creating the Federal Savings and Loan Insurance Corporation to insure deposits at all federally chartered savings banks.

1934

Franklin Roosevelt orders devaluation of the U.S. dollar and reestablishes the price of gold in terms of dollars at $35 an ounce. The U.S. government enforces a return of all gold coins and bullion to the U.S. Treasury. In this way, virtually all the profits from devaluation are captured by the governmnent. The higher price of gold creates enormous purchasing power in the U.S. for foreign holders of gold. Exports flow out of the U.S. and gold is accumulated.

1935

The Federal Reserve System is reorganized to centralize power in the hands of the Washington, D.C. Board of Governors.

1935

Italian economist Vilfredo Pareto's 1916 book, Mind and Society, is translated into English and published.

1936

John Maynard Keynes' book, The General Theory of Employment, Interest, and Money, is published in England. He advocates government intervention in markets, resorting to deficit spending if necessary to pull a nation's economy out of a recession.

1936

The U.S., Britain and France enter into an agreement to keep the price of gold stable and hold each other's currencies to minimize gold flows.

1936

Ludwig von Mises' book, Socialism, is published.

1937

Wilhlem Roepke's book, Econics Of The Free Society, is published in Austria. Roepke argues that it was "inflation ... especially the insidious inflation of credit money, which constitutes the greatest and most imminent danger." Franklin Roosevelt's economic advisers, and others in Europe, are concerned with declining prices -- with deflation -- and believe that by stabilizing prices businesses will be encouraged to renew production and begin to hire unemployed workers back.

1937

Adolph Lowe's book, The Price of Liberty, is published in London. Lowe leaves Germany after dismissal from his teaching position by the Nazi government and accepts a position at the University of Manchester.

1940

Richard T. Ely's book, Land Economics, is published.

1940s

Simon Kuznets develops the National Accounts system, out of which comes tools for measuring economic growth, such as Gross National Product.

1941

alvin Hansen's book, Fiscal Policy and Business Cycles, is published. Hansen (at Harvard University) goes way beyond Keynes in calling for government planning and sustained intervention in the economy.

1943

Harry Dexter White and John Maynard Keynes contribute to a plan for the postwar international monetary system. The decison is made to have the U.S. dollar replace the British pound as the primary currency of international exchange.

1943

Harold J. Laski's book, Reflections on the Revolution of Our Time, is published. Laski, who taught economics at the London School of Economics and the University of London, aksi served at chair of the British Labour Party from 1945-46.

1944

The Bretton Woods Conference in New Hampshire is held. Here, Keynes proposes a worldwide central bank charged with balancing pressures between borrowers and creditors. He also proposes the introduction of a new global currency. Harry Dexter White proposes the creation of the International Monetary Fund, in which all members contribute currency and would be able to obtain loans when necessary to settle currency balances with other members.

1944

Austrian economist Karl Polanyi's book, The Great Transformation, is published.

1945

The United States emerges from the Second World War with its industrial plant modernized and in possession of most of the world's gold reserves. The U.S. national debt stands at $250 billion.

1946

President Harry S. Truman signs the Employment Act of 1946, which commits the full resources of the U.S. government to the maintenanceof full employment.

1947

Marriner Eccles, chairman of the Federal Reserve System, calls for the Federal Reserve System's independence from the public debt management decisions of the U.S. Treasury.

1948

A Preliminary Draft of a World Constitution is prepared and signed by a group of intellectuals, including Mortimer J. Adler, Robert M. Hutchins, Harold Innis and Rexford Tugwell.

1947-1956

the General Agreement on Trade and Tariffs is negotiated and modified three more times. The GATT establishes the principle of "Most Favored Nation" status for multilateral adjustments in tariffs.

1950

The U.S. government holds gold worth $25 bilion (at the official price of $35 per ounce).

1950s

Economist Robert Triffin (who had worked for the Federal Reserve and the IMF) warned that meeting the world's need for currency reserves by relying on U.S. payments deficits and dollar outflows was a sure route to disaster.

1952

John Kenneth Galbraith's book, American Capitalism, is published. Galbraith argues that both liberals and conservatives operate under ideologically-based assumptions about how economies funcation that have little to do with the real world.

1952

British Labour Party leader and historian, R.H. Tawney, writes on wealth distribution in Britain: "Where conditions are such that two-thirds of the wealth is owned by approximately one percent of the population, the ownership of the property is more properly regarded as the badge of a class than as the attribute of a society."

1957

Ludwig von Mises' book, Theory and History is published. In this work and elsewhere, he challenges the assertion that the market system does not result in a win/win result for "all members of society."

1958

Louis Kelso and Mortimer J. Adler introduce the idea of "universal capitalism" (through the use of employee stock ownership plans) in their book, The Capitalist Manifesto.

1958

Between 1946-1958 the purchasing power of the U.S. dollar falls by one-third.

1958

During the year, 10 percent of the U.S. gold stock is claimed in return for U.S. dollars held by foreign central banks.

1960s

Per capita income in the top 22 developed countries rose by 50 percent. Martin Mayer writes in The Fate of the Dollar, that "much of this improvement in the international standard of living can be credited directly to the expansion of foreign trade, which permit's each nation to specialize more efficiently in what it does best."

early 1960s

Unrepatriated U.S. dollars are circulated in the Eurodollar Market, acting very much like a common currency in Europe. This leads to establishment by U.S. banks of overseas branches that operate outside U.S. banking regulations.

1963

Economist Milton Friedman, in testimony before the Joint Economic Committee, calls for floating exchange rates to help solve the U.S. balance of payments problem.

1963

Douglas Dillan, U.S. Secretary of the Treasury under Dwight D. Eisenhower and John F. Kennedy, writes that moved to floating exchange rates has one great danger: "If its own citizens lose confidence in its currency and start to try to transfer funds abroad, ... it is perfectly obvious that any amount of gold could be swamped very quickly."

1965

Conservative economist Henry Hazlitt describes the steady growth in government expenditures as "an open conspiracy not to pay the national debt."

1965

During the administration of U.S. President Lyndon B. Johnson, the U.S. dollar drops the statement: "Payable in silver to the bearer on demand."

1965

Despite the buildup of U.S. military forces in Southeast Asia, the recorded Federal deficit is just $2 billion. Lyndon Johnson declares is commitment to keepin the U.S. dollar freely convertible into gold at $35 an ounce.

1967

U.S. President Lyndon Johnson eliminates the Kennedy era investment tax credit on the grounds that it had slowed the flow of investment reserves from the U.S. to overseas markets.

1968

The U.S. budget deficit reaches $25 billion, the largest deficit since the Second World War. Investment in foreign ventures by U.S.-based companies reaches new heights.

1968

Economist Milton Friedman writes: "The link between gold and the quantity of money has become a rubber band. ...Whether desirable or not, it is impossible to restore now the close link that prevailed before 1933."

1968

Charles de Gaulle, President of France, calls for return to a gold standard. In the U.S., Brookings Institution economists lead the way in a call for just the reverse -- a separation of gold from the U.S. dollar and other currencies altogether.

1968

The U.S. Treasury announces it will no longer redeem the U.S. dollar for gold at $35 an ounce, except for demands by official monetary institutions in foreign nations.

1968

A two-tiered gold market is agreed to -- one between central banks at the office price of $35 an ounce, and a second private market at whatever the market will absorb. The market price of gold temporarily falls, as speculators liquidate their holdings. Contributing to the fall in gold prices is the fact that France is forced to sell off half of its gold stock to settle its accounts.

1969

U.S. President Richard Nixon, in order to close the budget deficit, introduces a 10 percent tax surcharge and removes certain exemptions from capital gains taxes.

1969

Rising interest rates in the U.S. initiates the creation of uninsured and unregulated "money market accounts" that attract funds away from the savings banks and commercial banks. This loss of low-cost deposits reaches $500 million in 1966 and $1 billion in 1969.

1969

Georges Pompidou succeeds Charles de Gaulle as President of France. He devalues the franc by 12 percent in order to stimulate the economy.

1970

Libertarian economist Murray Rothbard calls for privatization of the minting of coinage and reestablishment of the gold standard.

1970

The IMF begins issuing "Special Drawing Rights" (from a basket of paper currencies held) to expand liquidity, to replace gold that had disappeared from the system through the private markets, and to accommodate a gradual increase in the global price of gold.

1971

U.S. President Richard Nixon takes the U.S. off fixed exchange rates and suspends convertibility of U.S. dollars for gold (closing the "gold window"). The official price (which becomes meaningless, since the government refuses to redeem dollars for gold) is raised to $38 an ounce in 1972, and $42.22 in 1973.

1971

U.S. dollars held by foreign central banks increases from $3 billion in January to $30 billion. The system of fixed exchange rates collapses. The Germans shift to a floating exchange rate system. The British follow early in 1972.

1971

In August, the U.S. devalues the dollar, imposing a 10 percent tax on all imports. Low inflation and low interest rates in the U.S. contribute to a renewed outflow of financial reserves.

1972

Decentralist author and philosopher, Ralph Borsodi, designs a new money system for introduction into societies left impoverished by modernization. A model system of local currency (backed by basic commodities) is established in Indian and then brought back to the U.S. to New Hampshire (the "Exeter Experiment") with paper notes called "Constants."

1973

Janos Fekete of the Hungarian National Bank, writes on the fate of gold: "There are about 300 economists in the world who are against gold, and they think that goldis a barbarous relic -- and they might be right. Unfortunately, there are three billion inhabitants of the world who believe in gold. Now the problem is how can we three hundred convince the other three billion of the correctness of our ideas."

1973

The U.S. again devalues the U.S. dollar and raises the official price of an ounce of gold to $42.22. The beginnings of a new round of global commodities inflation is unleashed. Russian gran purchases contribute to an enormous rise in agricultural prices. OPEC imposes an oil embargo against the U.S. and the Netherlands for supporting Israel. The price of oil increases from $3 to $5 per barrel (and reaches $11.65 by the end of 1974). This trade takes place almost exclusively in U.S. dollars, which are deposited at interest in U.S. banks and invested in U.S. businesses, land, real estate, stocks, etc. -- or, more often, deposited in Eurobanks to be lent to LDCs to provide funds to pay for oil and other essential commodities.

1974

Economist Leondard Silk writes: "The reconstructed world monetary system ws founded on the strength of the American economy, ...the dollar and on the deficits in the U.S. balance of payments. Therein lay a serious contradiction: A strong dollar and chronic deficits in the U.S. balance of payments would in time prove to be incompatible; either the dollar would weaken or the American deficits would have to be ended. There was a further contradiction: If the American deficits ended, the flow of dollars that was providing the monetary reserves for world economic expansion would also cease."

1974

Economist Arthur Laffer, architect of the "supply side" resurgency among economists, writes to U.S. Treasury Secretary William Simon: "Marginal taxes of all sorts stand as a wedge between what an employer pays his factors of production and what they ultimately receive in after-tax income. ...Taxes of all sorts must be reduced. These reductions will be most effective where they lower marginal tax rates the most."

1974-1975

Oil shortages and the appearance of stagflation (i.e., high unemployment and high inflation simultaneously) in the U.S. and elsewhere. The value of industrial output fell 13 percent in the U.S., 10 pecent in Germany, somewhat more in the rest of Europe and 17 percent in Japan.

mid-1970s

Wall Street Journal writer Jude Wanniski introduces the supply-side ideas of economist Arthur Laffer to Republican Party member and U.S. Representative Jack Kemp, and eventually to Ronald Reagan.

1976-1977

The U.S. deficit reaches $60 billion in each year.

1977

Henry Wallich, member of the Federal Reserve's Board of Governors, expresses his optimism that Federal Reserve actions will steady the U.S. economy.

1977

Going from virtually zero in 1973, by 1977 international banks had made loans to LDCs and Eastern European governments of $250 billion. By 1980 this amount doubled to over $500 billion. Anticipating that oil prices woud go even higher, Mexico and Venezuela borrow heavily from the world's banks to fund development projects.

1978

Representatives of the nine Common Market nations meet in Bremen to establish their own European currency (the "Ecu") to protect their economies from U.S. monetary manipulations.

1978

In October, the U.S. dollar collapses on the international exchange market. President Jimmy Carter authorizes a program to defend the dollar, sellilng 1.5 million ounces of gold per month, yielding roughly $400 million each month in repatriated dollars.

1978

Economist Milton Friedman writes on taxation: "In my opinion the least bad tax is the proeprty tax on the unimproved value of land. The next least bad tax is a flat-rate teax on income above an exemption."

1978

The U.S. National Debt reaches $1 trillion.

1978

U.S. consumers pay over $40 billion annually for imported oil.

1978

The exchange value of the U.S. dollar falls by four-fifths between 1973-1978.

1978

Dollar denominated debt owed by the LDCs to the international bankers reaches $240 billion. The resulting demand for dollars keeps its exchange value from falling even more than it had.

1978

E. C. Riegel's book, Flight From Inflation: The Monetary Alternative is published. The manuscript was finished in the late 1940s but not published until Riegel's papers were examined and organized by Spencer Heath MacCallum. Riegel looks at the actions and powers of the state as anathema to the survival of democracy, including the state's control over the monetary system: "We are neither grounded in the philosophy of personal enterprise nor intelligently opposed to socialism, if we do not realize that a socialized monetary system must generate socialism."

1979

The external debt of developing countries as a whole (and of the 15 most heavily indebted countries) exceeds the value of all goods and services produced, by a favor of one and a half and growing.

1979

The price of gold reaches $300 an ounce in mid-year. Paul Volcker is appointed by President Jimmy Carter as the new Chairman of the Federal Reserve. Volcker is committed to a program of monetary restraint and high interest rates. However, rising interest rates do not attract financial reserves because the rate of inflation is still as high or higher.

1975-1980

A 1981 study issed by the Oversees Development Council in Washington, D.C. reveals that between 1975-80 nine countries were forced to renegotiate some $9 billion in payments.

1980

In January, the price of gold reaches $875 an ounce, but falls to $600 by year end.

1980

In the U.S., the Depository Institutions Regulation and Monetary Control Act is passed. This law effectively deregulates inerest rates and allows the savings banks and savings associations to begin competing with commercial banks and the money market funds. The ability to originate adjustable rate mortgage loans is approved in 1981.

1980

Historian Arthur Schlesinger, Jr., in testimony before the U.S. Congressional Subcommittee on International Trade, links U.S. economic growth to "inflation, wild-cat paper money and bonds sold to foreign investors and subsequently repudiated. ...In preaching fiscal orthodoxy to developing nations, we were somewhat in the position of the prostitute who, having retired on her earnings, believes that public virtue requires the closing down of the red-light district."

1980

Based on reports by the Federal Reserve, the total dollar claims outstanding in the U.S. reaches $7.45 trillion. This did not include Eurodollars held outside the U.S. Actual legal tender in circulation is said to be around $117 billion.

1980