Money Matters

Economics and the German Cultural Imagination, 1770-1850

Richard T. Gray

• Publisher: University of Washington Press
• Year: 2018
• ISBN:
  9780295807072
• Topic: Philosophy
• Subtopic: Political Philosophy

In Money Matters, Richard Gray investigates the discourses of aesthetics and philosophy alongside economic thought, arguing that their domains are not mutually exclusive. The transition in Germany from an agrarian or proto-industrial economy to a capitalist industrial economy, which was paralleled by a shift from the exchange of money in coin to the use of paper currencies, occurred simultaneously with an efflorescence of German-language literature and philosophy. Based on close readings of canonical literary and philosophical texts, Gray explores how this confluence led to a rich cross-fertilization between economic and literary thought in Germany during this period. Money Matters documents the surprising degree to which literature and philosophy participated in the creation of modern economic paradigms, as well as the extent to which economics influenced literature and philosophy. The cultural artifacts of the period demonstrate the existence of an "economic unconsciousness" persistent notions of value and exchange that inflect the aesthetic and thematic dimensions of literary and philosophical texts. This book offers a thought-provoking and original analysis of literature and ideas in the critical transition period from Kant and Goethe, through the German Romantics, to Marx.

Part One

ECONOMICS AND INTELLECTUAL CULTURE

1 / BUYING INTO SIGNS

Money and Semiosis in Eighteenth-Century German Language Theory

Monetary culture means that life is caught up … in its means.

—Georg Simmel (Philosophie des Geldes 336–37)

Exchanging Words for Money and Money for Words

THE METAPHORICAL FIELD CIRCUMSCRIBING ANALOGIES between language and money is undoubtedly one of the most productive in all of Western culture. Quintilian’s admonition in the Institutio Oratorio that one expend words as carefully as one spends money (2: 1.6.1), Ovid’s remark in the Ars Amatoria that words, like coins, are minted by public authority (3.479f), Nietzsche’s famous comparison of current words to coins that have lost their impression due to overcirculation (“Über Wahrheit und Lüge” 881), and Saussure’s identification of linguistic significance with monetary value (Course in General Linguistics 115): what all these metaphors have in common is that they draw on issues of monetary practice to elucidate the operation and use of language. The historical extension of this metaphorical field is matched by its broad cultural dispersion throughout the European languages: comparisons between money and language are just as likely to be found among English or French as they are among German writers.¹ The unusual vitality of this analogy between money and language is further reflected in the expansive semantic territory it encompasses. Aside from the common identification of words with coins, many other elements drawn from the sphere of finance, such as the notions of circulation, exchange, credit, banking, counterfeiting, investment, and so on, are frequently applied as metaphorical vehicles for the illumination of linguistic practices. But the metaphorical exchange between the realms of economics and linguistics runs in both directions, so that issues such as truth and falsehood, rhetorical embellishment, and reasonability, which are central to the discourse on language, are often transferred by means of metaphor to the domain of economics. The vitality and diversity of this metaphorical field gives the best indication that the analogy between money and language in particular, and between the realms of economics and linguistics in general, is underwritten by a wealth of substantive capital. Indeed, as Jean-Joseph Goux has argued (110), the coherence and organic nature of this relation indicates that what is at work here is not a mere analogy, but rather a deep-seated isomorphism between the domains of money and language.

In the revolutionary year 1789, Friedrich Gedike (1754–1803), the editor of the Berlinische Monatsschrift, one of the leading periodicals promoting Enlightenment culture in Germany, published an article titled “Verba valent sicut numi, oder von der Wortmünze” (Words have value as do coins, or On verbal coins). Gedike’s primary purpose in writing this essay was the rehabilitation of the word “Enlightenment,” which, according to his assessment, had taken on negative connotations over the course of its use and abuse (260–61). But what makes Gedike’s essay a revealing historical document is that to salvage the concept of Enlightenment he persistently relies on the analogy between monetary and linguistic economies. In fact, Gedike’s essay can be viewed as a metaphorical treasury that stores a more or less complete inventory of the analogical connections between money and language that were current in German language theory during the final decades of the eighteenth century: as coins serve to ease material commerce, so do words facilitate intellectual commerce (253–54); as money condenses wealth into a more portable and useful form, so do words make knowledge more flexible and manageable (254); words have values, as do coins, but like the latter their face values are often inconsistent with their actual material worth, their Schrot und Korn, or their weight and alloy (254–55); the meanings of words can shift with each usage, just as the value of coins can vary at different times of their circulation (255); much like the “clippers and pickers” profit from conscious manipulations of the value of coins, linguistic counterfeiters lend the stamp of credibility to words of meager intrinsic worth in order to deceive their interlocutors (256); moreover, just as the seigniorage, the cost of minting, is deducted from the metal content of a coin, so that the intrinsic value even of legitimate currency never completely measures up to its face value, the meaning of words that have just been freshly minted can also never be established with total accuracy and precision (255); finally, just as there are wardens of the mint whose charge it is to guarantee the weight of the coinage and to draw light coins out of circulation, so there must be wardens of language who oversee the coining of phrases and police their usage (256–57). Clearly, Gedike sees himself as just such a warden over the mint of language, and he hopes that his essay will help his contemporaries distinguish between “true and false enlightenment” as between “true and false ducats” (270).

Gedike’s essay bears testimony to the obsession of the late eighteenth century with exploring the isomorphism between the function and value of monetary currencies in the protocapitalist economy and the function and value of words in the Enlightenment economy of linguistic truth. Gedike’s inflated use of the money-language conceit is grounded in an awareness of its prevalence in the language theory of the eighteenth century. Indeed, this image is veritably omnipresent in theoretical discourses on language in this period, occurring not only in the linguistic reflections of Johann Caspar Lavater (1741–1801), Gottfried Wilhelm Leibniz (1646–1716), John Locke (1632–1704), David Hume (1711–76), Johann Gottfried Herder (1744–1803), Johann Georg Hamann (1697–1733), Johann Wolfgang von Goethe (1749–1832), and A. R. J. Turgot (1727–81), but arising in the linguistic theories of many lesser-known figures as well. What is more, Gedike’s essay is representative of the way in which eighteenth-century authors explored the richness of this metaphorical field, mining not only the mother lode, but also exploiting its many associative veins.

The depth to which this homology penetrated the thought of bourgeois intellectuals in this period is probably best demonstrated by the fact that the metaphorical exchange between the realms of economics and linguistics ran in both directions, so that just as monetary images were employed to describe the functioning of language, examples from the realm of language were used in economic treatises to elucidate the operation and essence of money. Turgot, one of the leading French physiocrats, remarked already in 1769 on the underlying systematic, formal affinities between money and language. “Money has in common with measures in general,” he argued in his essay “Value and Money,” “that it is a type of language, differing among different peoples and in everything that is arbitrary and conventional, but of which the forms are brought closer and made identical, in some respects, by their relation to a common term or standard” (133). Language, like money, Turgot had already recognized, is governed by the logic of the general equivalent.² Similarly, the eighteenth-century German economist Johann Georg Büsch (1728–1800) identified the semiotic nature of money and language as the basis of their inherent relationship. In his Abhandlung von dem Geldsumlauf (Treatise on the circulation of money) of 1780 he noted: “We have languages as signs of concepts. We have money as signs of the value of things” (1: 151). Moreover, in order to justify the wholly arbitrary relationship between monetary units and the commodities for which they can substitute, Büsch relies on a theory of language that defines both its articulated sounds and its written signs as instituted by arbitrary human convention (1: 150). Thus, already for Büsch the monetary and linguistic economies appear as systems whose operation depends on the circulation of signs. Indeed, as we will see, this semiotic affinity forms the principal tertium comparationis that underwrites the analogy between money and language for eighteenth-century thinkers.³

Succumbing at this juncture to an urge for historical speculation, let me sketch briefly some of the sociological and intellectual-historical factors that help to account for this rampant appropriation and exploitation of the money-language conceit in eighteenth-century letters. It can scarcely go unnoticed, first of all, that this century was one of far-reaching economic and monetary transformation. As a counter to the increasing dominance of mercantilist economic and monetary policies, which laid stress on a positive trade balance and defined wealth in terms of surplus metallic coin,⁴ physiocratic doctrine, which emphasized agricultural production and championed the virtues of unregulated trade, emerged late in the century and became one of the most hotly debated economic issues of the day.⁵ Of primary importance in drawing general attention to the operation of monetary systems was certainly the infamous instability of the major European currencies during this period, due largely to the corrupt intervention of political authorities into the practices of coinage and currency. In this regard Adam Smith noted in The Wealth of Nations,

For in every country of the world, I believe, the avarice and injustice of princes and sovereign states, abusing the confidence of their subjects, have by degrees diminished the real quantity of metal, which had been originally contained in their coins. The Roman As, in the latter ages of the Republick, was reduced to the twenty-fourth part of its original value, and, instead of weighing a pound, came to weigh only half an ounce. The English pound and penny contain at present about a third only; the Scots pound and penny about a thirty-sixth; and the French pound and penny about a sixty-sixth part of their original value. (1: 43)

This general tendency toward a devaluation of currency seemed to reach its culmination with the substitution of paper for metallic coin. Indeed, the introduction of paper currencies in the form of bank notes was an event for many no less earth-shattering than the Lisbon earthquake of 1755, since it called into question the traditional definition of money as a commodity with intrinsic value.⁶ The effects of John Law’s monetary reform in France between 1716 and 1720, which included the introduction of paper money, are well known and scarcely need mention.⁷ Less well known are the manipulations of the value of the Prussian taler undertaken by Frederick the Great during the Seven Years’ War in order to finance his war debt. The result of these governmental interventions into the Prussian monetary system was a steep decline in the value of the taler, leading not only to a widespread mistrust in this coin and the state whose stamp guaranteed its value, but opening the door to general misgivings about the institution of money itself.⁸ Finally, due to the discovery of large quantities of silver and gold in the New World and their influx into Europe, the value of these metals underwent substantial fluctuations, and this led to a radical destabilization of the value of gold and silver coins.⁹ Between 1500 and 1800, the mines of the Americas accounted for no less than seventy percent of the world’s output of gold and eighty-five percent of its production of silver. This radical influx of specie into the European economies caused the prices of the precious metals to fall by about one-third of their former value, and this, in turn, resulted in a concomitant inflation in the prices of consumer goods, which by one estimate reached as much as four hundred percent in Spain by 1800 (Weatherford 99–101). This variation in the value of metallic coin demonstrated above all the fact that money was but one commodity among others, subject to the oscillations in price dictated by the logic of the market, especially the parameters of supply and demand. The upshot of these diverse events for the general European populace was an intense psychological uncertainty concerning matters of money and value, predicated on the unsettling recognition of the fundamentally abstract nature of money, a substance whose materiality had hitherto scarcely been called into question. What was beginning to make itself felt, in short, was the paradigm shift from a substantialist to a functionalist conception of money. Consistent with this transformation was the emerging theory of monetary circulation, which played down money’s significance as a commodity and began to see it as a mere expedient of commerce and exchange, an “oil which renders the motion of the wheels [of trade] more smooth and easy,” in the words of David Hume (309).

At the same time, and parallel to this concern with the transformation of monetary instruments, the eighteenth century was a time of intense deliberation on the origin, nature, and function of language. Central here is the emergence of the discipline of semiotics as fundamental to the science of knowledge, a proposition first advanced by Locke in his Essay Concerning Human Understanding (1689) and subsequently carried over into German philosophy by Johann Heinrich Lambert (1728–77) in his Neues Organon (1764), one of whose four parts dealt explicitly with the nature of signs and their role in the discovery of truth.¹⁰ As Ulrich Ricken has argued (10–17), language theory of the eighteenth century was marked by a transition from the rationalist Cartesian paradigm to the sensualist, sign-oriented model advanced by Locke and Etienne de Condillac (1714–80). This shift was significant because it led to a reconceptualization of language, previously viewed as a mere communicative vehicle, to a theory that recognized it as a cognitive, creative, knowledge-producing medium. But the insight into the semiotic nature of language was both a boon and a bane for eighteenth-century philosophy: a boon because it made possible this knowledge-productive conception of an ars characteristica or an ars combinatoria, a calculative sign-language on the basis of whose manipulation previously unknown truths could be discovered;¹¹ a bane because, to quote Locke, words “interpose themselves so much between our understandings, and the truth which it [sic] would contemplate and apprehend, that, like the medium through which visible objects pass, the obscurity and disorder do not seldom cast a mist before our eyes, and impose upon our understandings” (274).

The same was true for the eighteenth-century conception of money, which, as the above-cited passage from Büsch’s Abhandlung von dem Geldsumlauf indicates, was also beginning to be conceived as a semiotic system. In fact, one of the major economic debates of the eighteenth century turned on the semiotic character of money: whereas progressive economists such as Adam Smith had recognized that as pure sign, that is, in the form of paper currencies, money could function as a stimulator of trade and a catalyst to the increase of wealth (1: 291–302), more conservative economists like Turgot (and the physiocrats in general) asserted that this “sign-money,” as it was already called, was but a mere deceptive sleight of hand, an economic edifice built without a foundation. Thus in his “Letter on Paper Money” Turgot unequivocally maintained that “[i]t would be ridiculous to imagine that money is only token wealth, the repute of which is based on the stamp of a prince” (4). Similarly, in his “Reflections on the Formation and Distribution of Wealth” Turgot defended gold and silver as natural money with inherent value: “[G]old and silver [are] constituted money, and universal money, and that without any arbitrary agreement among men, without the intervention of any law, but only by the nature of things. They are not, as people imagine, signs of value; they have a value themselves” (62–63).

This, then, is the most significant point of convergence between the eighteenth century’s philosophy of language and its theory of money: both were conceived principally as semiotic intermediaries whose interposition in their respective domains of exchange had the potential to be either immensely productive or immeasurably destructive. Indeed, the recognition of the semiotic nature of words and money extended deep into the theories of each discipline. For just as the philosophers of the eighteenth century came to realize that words are signs twice removed—signs of concepts that in turn are signs of things—economists came to understand “sign-money,” defined as any currency whose symbolic value stamped upon it does not coincide with its real value as commodity or as precious material, explicitly as a sign of a sign, specie being understood generally as an immediate sign of value.¹² In an essay published in Gedike’s Berlinische Monatsschrift in 1796, the economist Moses Wessely (1737–92) can thus propose the following definition: “Symbolic money, the symbolic sign of a bill of exchange drawn on society (paper money), is only the representative of a representative” (“Geld und Zirkulazion” 308). This understanding of verbal expression and emergent “symbolic money” as second-order systems of signification is perhaps the fundamental homology that underpins the comparison of money and language in the eighteenth century.

Well before the French Revolution, German intellectuals were aware that they were living in a time of profound intellectual and social transformation. The economic and monetary revolutions of the eighteenth century, marked by the shift from a substantialist to a functionalist paradigm, were perhaps the most concrete, tangible forms in which these changes were experienced. In monetary theory these transformations were expressed in the recognition that, with the introduction of paper currency, two of the functions traditionally served by money as specie, to be a store of value as well as a medium of exchange, had been disassociated. Wessely articulated this split by asserting that paper money only has value when used in exchange for something, that is, when being spent, whereas specie has value independent of its role in the circulation of goods (311). Wessely’s attitude toward “symbolic money” was characteristically ambivalent: although he recognized its beneficial effects as a stimulant to circulation, useful especially during economic declines (308), he also attacked the Spekulationsgeist, the “spirit of speculation” it introduced and warned that the use of paper money amounted to nothing other than a mortgaging of the...