Capital, Industriousness, and Private Banks in the Economic Imagination of a Nineteenth-Century Statesman

Abstract

Between 1793 and 1815 the leading states of Europe found themselves almost constantly at war. Statesmen charged with keeping treasuries full confronted crushing challenges. Their task was complicated by a growing sensitivity to the importance of foreign trade in general, and the boom in British cotton exports, in particular. To such traditional government concerns as protecting the nation’s money and filling its treasury the emergence of political economy now added additional “economic” duties, which included encouraging commerce and the growth of capital. At the intersection of theoretical political economy and state policy, and the intersection of credit, money, and budgets, was the effort to understand and organize banking. The years of warfare straddling the eighteenth and nineteenth centuries witnessed banking innovation throughout Europe and produced fundamental economic works on the subject. English economist David Ricardo became famous by criticizing the Bank of England and demanding a return to the gold standard. Less well known, but occupied by similar concerns, was the Russian official and political economist, N.S. Mordvinov. A review of Ricardo’s and Mordvinov’s ideas from this period illuminates the ways in which Russian banking resembled and differed from the English system and demonstrates the common nature of the problems Russian and English political economists perceived.¹