Working Paper Series: IL. 29/07

In this paper I analyze the monetary theories underlying the arguments that Locke and Lowndes directed against each other during their discussions around the Great Recoinage of 1696. My primary place of interest is the theory that Marx calls “the theory of the nominal standard of money”, which is the theory that the monetary names stand for definite quantities of value, so that the unit of money is a unit of value. I argue that Lowndes appealed to this theory and that the criticism of it offered by Locke is fundamentally correct, in spite of which Lowndes ’ language and ideas can be very often found in current discussions about monetary problems. In the course of this theoretical investigation, I have come across the critical commentaries of Steuart and Marx, which are not paid the attention they deserve in the standard literature. Marx commentary is of special interest because it contains a solid theoretical explanation of the concepts appealed to in the debate and puts it in a very interesting practical perspective. This paper was presented at the 11th Annual Conference of the European Society for the History of Economic Thought (ESHET). I greatly benefited from the debate that followed my presentation. In particular, I have to thank the interesting comments of Seiichiro Ito and Ludovic Desmedt. I am also indebted to my Department fellow Javier Arin for his critical formulations on monetary problems