Thomas Joplin and Classical Macroeconomics.

• Author: Rashid, Salim

A thorough review of this exciting new book would require a reworking of all the major controversies in British monetary thought between 1800-1850. All that can be attempted here is some statement of the issues involved and to indicate what might be required for their satisfactory resolution. The book brings to life one of the economic "exiles"--an economist whose brilliance was not enough to gain him recognition. All of us have personality defects and with Joplin, as with the rest of us, they only became exaggerated through repeated failure. So Joplin died--poor, bitter but not broken. Despite the almost spiteful neglect of his contemporaries, Joplin tried to help others to the end of his life, making the reform of prostitutes his last good deed.

Joplin's case was so interesting that I dug up the three pieces available here and read them [1; 2; 3]. Joplin is generally clear and interesting. Much like his hero, Henry Thornton, Joplin writes with the assurance of someone who has direct personal knowledge of his subject matter. While Joplin is generally clear on individual issues, making his 50 pamphlets read consistently is another matter and O'Brien is to be congratulated for having made the aggregate so comprehensible.

What is singularly important about Joplin is that he had the facts right. Not necessarily in details but in the orders of magnitude. And this is extremely important because it determines the agenda for good theories. Firstly, that the country bank issues were the most volatile and the important part of the money supply. Secondly, that country bank issues were essentially independent of Bank of England notes, and thirdly, that country bank issues determined movements of the price level and hence, given time, of the balance of payments. Joplin's careful insistence of these issues makes his contribution of first-rate importance. O'Brien not only tests these statements with the data Joplin so carefully collected, but also with more modern series, and Joplin comes out very creditably.

The notable features of Joplin's monetary thought are the following: the existence of two circulations, an "abstract" one that dealt with savings and investment and a "consumptive" circulation which served for the transactions of current income; country banks, which issued the primary currency, kept the rate of interest fixed and reacted to the state of demand by varying the quantity of notes issued; this behavior of country bank notes reflected a...