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MMT in 1797?

N.A.M. Rodger, The Command of the Ocean, p 438:

On 2 February 1797 three French frigates landed 1,500 troops on the coast of Wales near Fishguard. The soldiers were mostly liberated criminals commanded by an American adventurer, and within twenty-four hours they had surrendured to the local militia without firing a shot. In military terms the expedition was pure comic opera, but its consequences for the government in London were not at all funny. The news that French troops were ashore on the British mainland caused a run on the banks. Gold was already short, mainly because so much had been exported to subsidize Britain's allies, or spent on importing grain after the bad harvest of 1795-6, and the Bank of England was forced to suspend the convertibility of its notes. This temporary measure (which lasted until 1821) ["Temporary"?] can be seen in retrospect to have been thoroughly helpful. The note issue continued to be managed with prudence; neither the credit of the Bank nor the value of the currency were seriously damaged. Going off the gold standard allowed the British economy during the course of the war to be gently reflated, ensuring maximum production and employment. At the time, however, what was visible was an acute financial crisis which threatened the government's ability to continue the war, and even maintain the fabric of society.

That sounds an awful lot like MMT, especially the part about "gently reflate the economy." Yes, the British government "just printed money" and won the Napoleonic wars!

NOTE Probably scholars know all about this, but I thought it was interesting. Yes, I read very long books on military history for pleasure.

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CMike's picture
Submitted by CMike on

However, it is interesting to note that if you zoom in and look here and here, the advent of the eras of Pax Britannica and Pax Americana correspond time wise to the positions of the debt peaks illustrated on the respective two charts. But make no mistake, the ensuing golden ages for the two empires occurred as those debt levels were falling away due in large part to some spectacular foreign trade advantages each enjoyed and exploited for a season.