Departmental Bulletin Paper アダム・スミス著『国富論』における「紙幣過剰」分析について
Adam Smith’s Analysis of “Excessive Circulation of Paper Money” in The Wealth of Nations

松尾, 純

While Adam Smith on many occasions refers to the phenomenon of“over-stocked with commodities” in his An Inquiry into the Nature andCauses of The Wealth of Nations, Smith’s basic position is that anoversupply of commodities cannot generally occur. However, with regardto currency (money and paper money), Smith employs such terms as “overstockedwith paper money” and “excessive circulation of paper money,” andexpends a considerable number of pages in his book to examine thephenomenon of “excessive circulation of paper money” and to analyze indetail the causes of this excess from various perspectives.Smith’s basic position is that the volume of paper money in circulationshould be equal to the value of the gold and silver money that it replaces,and that it cannot exceed the total value of gold and silver money.However, Smith confronts a situation where the volume of paper money incirculation actually exceeds the total value of the gold and silver moneythat it supposedly replaces.Regarding the “original cause” of the “excessive circulation of papermoney,” Smith states: “The over-trading of some bold projectors in bothparts of the United Kingdom was the original cause of this excessivecirculation of paper money.”As long as banks make “advances” with propriety and within limits,“excessive circulation of paper money” cannot occur. However, amechanism exists whereby banks can easily exceed such limits, whichSmith identifies as “cash accounts.” The question is why banks, which canbe assumed to have a good understanding of the use of “cash accounts,”engage in “excessive advances,” which results in the “excessive circulationof paper money.” Smith refers to the factor that undermines the prudentand appropriate judgement of bankers as the peculiar desire of traders to“extend their projects.” Smith observes that the desire of traders to“extend their projects” gives rise to and promotes the use of the “practiceof drawing and redrawing” ( = “expedient”). If numerous traders “abuse”the “practice of drawing and redrawing” to raise money, this willeventually leave banks with no choice but to issue paper money in excessof the gold and silver in domestic circulation (the limit of lending by banks).Smith’s “bold projectors” are those who abuse the financial system toraise as much money as they desire so that they can rake in the profitsthrough their “chimerical” and “extravagant undertakings.”Projectors undertake “vast and extensive projects” to realize their“golden dreams.” What is used to realize these “golden dreams” are suchmeans of “raising money” as “cash accounts,” “drawing and redrawingpromissory notes,” and “circulating bills.” Smith believes that the use ofthese methods supports the “vast and extensive projects” of projectors andthe demands of projectors give rise to excessive circulation of papermoney.The “vast and extensive projects” of projectors are not undertakings thatarise at the end of a real economic process (process of accumulation ofexcess capital). They are based on unfounded “dreams” that areundertaken by “bold projectors” who extract excessive bank loans by usingsuch “expedients” as “cash accounts,” “drawing and redrawing ofpromissory notes,” and “circulating bills.” This allows the pursuit of “vastand extensive projects” which result in the phenomenon of “excessivecirculation of paper money.”If this is the reality of Smith’s theory of “excessive circulation of papermoney,” it must be said that Smith’s theory is fundamentally different fromMarx’s concept of “plethora of capital” as expounded in Part III of DasKapital, and Fullarton’s concept of “plethora [of capital]” found in hisRegulation of Currencies (1844), which is considered to be the antecedentto Marx’s “plethora of capital.”Marx and Fullarton point to the accumulation of excess capital causedby falling profit rates as the starting point in the process that gives rise to“plethora of capital.” In contrast, Smith posits that “excessive circulation ofpaper money” results from the “vast and extensive projects” that are basedon the “dreams” of “bold projectors.” However, Smith provides noexplanation for why “bold projectors” entertain such “nightmares.”In a previous paper on the subject of “plethora of capital” in the works ofMarx and Fullarton, I wrote as follows.Fullarton discusses “plethora of capital” in the latter part of Chapter VIIIof his Regulation of Currencies. The content of this section can beschematized as follows. The accumulation of “annual saving from incomeand the large fortunes in constant course of remittance from the colonies”→ accumulation of “the amount of capital seeking productive investment”→ accumulation of “over-flowings of domestic capital, which exceed theimmediate capacity of advantageous employment offered by the homemarket”and “over-supply of capital” → “splendid visions of gain” based ona “wild spirit of speculation and adventure” and “speculative excitement” →give rise to the condition of “plethora of capital.”Marx’s discussion of “plethora of capita” appears in the first part ofChapter 15 Section 3 of Volume III Part III of Das Kapital, the content ofwhich can be outlined as follows. “As the profit rate falls, so there is agrowth in the minimum capital… Concentration grows at the same time…This growing concentration leads in turn, at a certain level, to a new fall inthe rate of profit. The mass of small fragmented capitals are[sic] therebyforced onto adventurous paths: speculation, credit swindles, share swindles,crises. The so-called plethora of capital is always basically reducible to aplethora of that capital for which the fall in the profit rate is notoutweighed by its own mass.”The theories of Fullarton and Marx greatly differ from the content ofSmith’s theory of “excessive circulation of paper money.” Both Fullartonand Marx place emphasis on why the psychological conditions of “wildspirit of speculation and adventure” and “speculative excitement” aregenerated. On the other hand, Smith provides no explanation for theoccurrence of conditions that Fullarton calls “wild spirit of speculation andadventure” and “speculative excitement.” In Smith’s conception, the “wildspirit of speculation and adventure” that results in “excessive circulation ofpaper money” is based on the unfounded “dreams” of “bold projectors” whoappear accidentally. By contrast, in the theories of Fullarton and Marx,people are inevitably forced into the psychological conditions of “wild spiritof speculation and adventure” and “speculative excitement” that leads to“speculation, credit swindles, share swindles” as a consequence of the overproductionand over-supply of real capital. Smith considers the originalcause of “excessive circulation of paper money” to be the psychologicalcondition of the “dreams” of “some bold projectors in both parts of theUnited Kingdom.” By contrast, Fullarton and Marx identify thefundamental cause of “plethora of capital” to be the real phenomenon of theover-production and over-supply of capital that inevitably occurs in thecourse of capitalist development.

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