THE

MODERN ATHENIANS

THE EDINBURGH REVIEW

IN THE JEFFREY YEARS, 1802-1829

Tag Archives: Napoleonic Wars

Currency and Finance

the consideration of currency – money and other representations of value that did not themselves establish that value – constituted one of the most perplexing and convoluted aspects of romantic-era finance, and one which preoccupied the Edinburgh under Jeffrey’s editorship.

MONEY exists, broadly, in two particular formations, commodity money in which the value of the money derives from the material – usually a metal – from which it is made, and fiat money, whose value is determined by the support of the government. In practice, economies contain complex blends of these forms, along with an intermediate form of paper money that is exchangeable, at least in principle, for a specific commodity, such as a quantity of gold.  Money is in general issued by governments, but various mediums of exchange that serve similar purposes can be produced by banks and other financial institutions. The organization of money, its rates of circulation, and structures of loaning that convert money into a commodity in itself, all contribute to the financial industry as it develops from the founding of the Bank of England in 1694. As international trade increases, the exchange of values between nations using distinct currencies required both legal regulation and increased public comprehension of prices. The regulation of money, such as fixing wages to the price of bread in the Speenhamland Acts of 1795, simultaneously shaped and regulated markets.  Because of mounting governmental debts and decreasing stores of gold, in the midst of a run on the banking system, the government in 1797 enacted a Banking Restriction that suspended the government’s obligation to exchange paper money for gold. The result was a transformation of the monetary system – and the rhetoric of it – into one in which financial stability was located in the solidity of the merchant class and the government. For the founders of the Edinburgh, especially Jeffrey and Horner, the Bank Restriction Act served to demonstrate the effectiveness of public discourse in regulating economic activity. Yet the effects, both local and international, both immediate and long-term, were subject to intricate debates, and from 1797 to 1821, when the Restriction was lifted, the ‘Bullionist’ controversy raged throughout the pamphlet and periodical presses on the effects of the Restriction Act and a variety of other measures that shaped monetary policies. Bullionists believed that the convertability of paper money into gold was a necessary check on inflation, and that the increasing circulation of paper money would drive gold out of England – and worse, into France, where it could be reshaped into military might. This complexity meant that the Napoleonic wars had distinct economic components, with opponents seeking to destabilize the currencies of their enemies.

The Edinburgh repeatedly returned to discussions of currency and its effect on trade, financial institutions, and government; more than 600 articles from 1803-1830 mention ‘money’ (about the same rate as the Quarterly, but notably less frequently than many periodicals, including, in the 1820s, Blackwood’s Edinburgh Magazine). In its first issue, it offered a distinctly positive and measured review (written by Horner) of Henry Thornton’s Paper Credit, a cautious endorsement of the Restriction Act. Eventually, Horner and Thornton would team up as principal authors of the Bullion Report of 1810-1.

In 1808, responding to Thomas Smith’s ‘Essay on the Theory of Money and Exchange’ and the vagueness with which both Smith and his predecessors have defined money mistakenly as a ‘measure of value’, and insisting this failure leads their analyses astray, the Edinburgh declared that to call money a ‘measure’, is to use that metaphorically; where a ‘pint’ is a ‘measure of water’, it is only metaphorically that ‘a shilling measures a quarter loaf’. This metaphor conceals a most crucial quality of money, namely that – unlike standards of measures such as the pint and the yard – ‘it is itself perpetually subject to variations’ (ER 13:4, 39). After demonstrating the absurdity of considering money as an ‘abstract idea’ (43), the Edinburgh demonstrates, with an amusing narrative, that the inconvenience of barter exchange occurs because of the specificity of commodities: a man with a sheep desires a hatchet, but a sheep is worth 6 hatchets, and he cannot give only a sixth of the sheep, and in any case, the man selling the hatchet ‘does not want to purchase a sheep, but a cloak’. The Edinburgh rehearses a historical imagining by which precious metals are simply a common object of barter and, by social practice, are shaped into recognizable forms – coins – in which the stamp indicates an established quantity of the metal. The conclusion drawn is that ‘coins are mere commodities, subject to the laws which regulate the purchase and sale of all other commodities’ (49).

Yet this understanding of money became complicated as money entered the discourse of contracts, where money was both ‘the standard, by a comparison with which the relative values of commodities is ascertained’ and ‘also the equivalent, by the delivery of a fixed amount of which, the stipulations, in almost all contracts and agreements, may be discharged’. Considering three books that concerned the ‘Pernicious Effects of Degrading the Standard of Money’, the Edinburgh, declaring that making ‘any direct alteration in the terms of a contract’ by the government would be a ‘tyrannical interference with the rights of property that could not be tolerated’, decried a substitute strategy of ‘altering the standard’ and consequently and simultaneously altering the purchase power – the actual determinate by which one agrees to a price – that is ultimately delivered. Demonstrating a strategy of devaluing currency in order to reduce national and royal debt, the Edinburgh notes that the result – the fact that the government and monarchy now must also use the degraded money for purchasing – means that no long-term gain is achieved by resolving debt in this fashion (ER 35:2, 474) and the government’s ability to borrow is curtailed. Thus, the prolonged restriction on paper money meant that the quantity in circulation, held steady by the discipline of the government and the watchful accounting of the public press for the first decade of the Back Restriction Act, gave way to a dramatic rise in the amount of paper money and a corresponding depreciation of its value, thus effectively transforming contracts in favor of debtors as against creditors (478).

The Edinburgh, however, goes on to argue that the return to a gold standard is similarly damaging, although in the opposite direction, forcing debtors to pay a higher value than their loan stipulated. In 1826, the Edinburgh continued to warn against that ‘sudden change in the quantity, and, consequently, in the value of money’ (ER 44:1, 71). A vital component of its promulgation of political economy, the Edinburgh under Jeffrey continued to chart the increasing rise in international money markets as well as to insist on an empirical basis for its understanding of the importance of the rate of monetary circulation as an indicator of economic health.

Mark Schoenfield, Vanderbilt University

Polanyi, Karl. The Great Transformation: The Political and Economic Origins of Our Time. 1944. (New York: Beacon Press, 1957).

Laidler, David, ‘The Bullionist Controversy’, in Money, Eds, John Eatwell, Murrey Milgate and Peter Newman. (New York: Macmillan Press, 1989).

Nationalism and Cosmopolitanism

are important political ideologies that shaped modern understandings of nationness and which continue to inform – and, indeed, circumscribe – present-day thinking about national, international, and universal belonging.

NATIONALISM AND COMSOPOLITANISM are part of a broader complex of ideas about nations and national identity that emerged along with the modern nation in late eighteenth- and early nineteenth-century Europe. In an age that witnessed not only two key revolutions which redefined the nation-state (the American Revolution and the French Revolution) but also ongoing reconfigurations of national identity and national borders both on the Continent (Napoleonic Wars) and within Britain (the Acts of Union bringing Scotland and Ireland into Great Britain), the question of nation was a critical one. Nationalism and cosmopolitanism operated in the period as competing (although not always oppositional) responses to this question. In general, nationalism and cosmopolitanism rest on different notions of what a nation is and what it means to belong to a nation.

Nationalism typically defines the nation in particularist terms such as language, history, blood, and geography. In these models, the nation is considered homogeneous and unified, and it is thus frequently imagined as an organic whole. Such particularist notions of nation lend themselves to understandings of national identity and national character as something essential or non-voluntary. Also, because it conceives the nation as both distinct and discrete, nationalism often justifies political projects of national sovereignty and self-determination and supports economic and political policies such as isolationism and non-intervention.

Cosmopolitanism, in contrast, builds out of Enlightenment notions of the civil contract, and – like liberal or civil nationalisms – typically defines the nation in the rationalist and abstract terms of shared rights and shared constitution. In this formulation, national identity is neither essential nor exclusive, and can therefore co-exist with other national and transnational affiliations. In general, however, cosmopolitanism subordinates national belonging to universal belonging. As a political or economic category, then, cosmopolitanism considers nations in their relation to international or global structures, arguing that nations are dependant upon those broader structures for their integrity or preservation, or arguing for the elimination of nations or national borders altogether. As the above definitions suggest, nationalism and the cosmopolitanism have a close and unstable relationship in late eighteenth- and early nineteenth-century European thought. At their most basic, however, nationalism privileges the national over the universal, and cosmopolitanism privileges the universal over the national.

From 1802 to 1829, the Edinburgh Review was arguably the most influential proponent of cosmopolitanism in Britain. From the start, the early Edinburgh aligned itself with both Scottish and Continental projects of enlightenment, advocating an ‘innocent cosmopolitanism’ of the intellect to counter the prevailing ‘violence of national animosity’ (ER 1:253). Setting itself against the parochial prejudices and insular small-mindedness of its predecessors and rivals, it cultivated a cosmopolitan attitude of disinterestedness and open-mindedness towards subject matter both local and foreign. Indeed, an important part the Edinburgh’s mandate was to inform Britons about political and intellectual developments taking place outside of Britain, especially those taking place of the Continent, and its first volume tellingly included numerous reviews of foreign works, including J. J. Mounier’s De l’Influence attributée aux Philosophes, and Charles Villers’ Philosophie de Kant. Significantly, the periodical’s commitment to reviewing foreign works continued throughout the Napoleonic wars, a time when other periodicals ceased to review foreign literature for fear of being suspected of Jacobinism. Influenced by the socio-political theories and political economy of the Scottish Enlightenment, the early Edinburgh Review took a cosmopolitan approach to the important issues of its day, including the question of nation. More often than not, the periodical advanced a cosmopolitan understanding of the nation as a heterogeneous and non-unified civil entity, an understanding that informed its own self-identification as a British periodical coming out of a post-Union Scotland, as well as its support for various national insurrections taking place on the Continent. Politically, the early Edinburgh considered British affairs to be closely tied to what was happening on the Continent, and it broached a liberal model of Europe as a ‘great federacy’ of nations (ER 1:354). Economically, it drew on the political economy of countryman Adam Smith to argue for a commercially-based internationalism in which commodities circulated freely across national borders. Overall, the cosmopolitanism of the early Edinburgh Review stood out in the nationalistic political climate of early nineteenth-century Britain, especially during the Napoleonic Wars, and it was repeatedly attacked as unpatriotic: ‘the watchword of Government was let loose upon us; and we were accused of wishing to lower the flag of England to her former rebellious colonies; and, in conjunction with our Transatlantic brethren, to aid Bonaparte in his views of universal empire:—and this because we were wanting in that truly British feeling, which is ready to sacrifice every opinion to that of the Minister of the day” (ER 20:234). Renewed interest in the question of nation at the end of the twentieth-century, however, has given new life to many of the cosmopolitan tenets advanced in the early Edinburgh Review.

Esther Wohlgemut, University of Prince Edward Island