The Rise and Growth of Classical Monetary Economics in Britain, c.1750-1870

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This Study has traces the rise of Classical Monetary Theory which had developed since c.1750 through the confrontation with the quantity theory of money by D.Hume in one, opposition with the real bills doctrine since John Law in the other. Adam Smith built the basics of the classical monetary theory based on convertibility. Though his theory has been often confused with the real bills doctrine, the true protagonist of this theory is Sir J.Steuart. Their theoretical difference emerged in their policy making over the enactment of the 1765 Act or the way of thinking of the Bank of England. This is the first result of this study. The classical monetary theory was first fully systematized by David Ricardo. His theory and policy were of the kind that put a rule and discretion together flexibly (He was almost the first to introduce the system of the open market operation in the history of monetary thought) based on convertibility, and it may be said that, indeed, his plan of establishing a national bank was the "central bank" design in the modern sense of the word. Centering around the theories of Smith and Ricardo, perhaps this study treats with the whole of the Boyd -Baring Controversy, from its beginning 1797-1801 when their debates was to become the "origin of the Bullionist Controversy," to its aftermath which reached well to the first half a century in the 20th century. Furthermore, Iexamined the monetary thought of Thomas Robert Malthus who was one of the representatives of classical economists, and who was called both a first Cambridge School economist and a monetary economist" by J.M.Keynes. I also investigate his influence reaching well into the twentieth century.