Prof. Jayanth R. Varma’s Financial Markets Blog

A blog on financial markets and their regulation

Casualties of credit

I just finished reading Carl Wennerlind’s book Casualties of Credit about the English financial revolution in the late seventeenth century. Much has been written about this period including of course the seminal paper by Douglas North and Barry Weingast on “Constitutions and commitment” (Journal of Economic History, 1989). Yet, I found a lot of material in the book new and highly illuminating.

Especially interesting was the description of the crisis of 1710 – which I think was the first instance in history of the bond market trying to arm twist the government to change its policies. I was also fascinated by the discussion about how Isaac Newton used his vast talents to hunt down coin clippers and counterfeiters, and then ruthlessly sent them to the gallows. I knew that apart from inventing calculus and much of physics, Newton had time to dabble in alchemy, but I had thought that his position as Master of the Mint was a sinecure. Well Newton chose not to treat it as a sinecure.

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