Some Considerations of the Consequences of the Lowering of Interest and Raising the Value of Money. In a Letter to a Member of Parliament.
London, Awnsham & John Churchill 1692
Small octavo, 15 x 8.8cm, contemporary mottled calf, rebacked, five raised bands, leaf edges mottled pp.(4) +4 +192, title within double ruled border with the licence leaf, with the errata pasted to the verso of A4, early ownership in ink on inner board of D.Race, an excellent copy.
Wing L2760. Kress 1792. Goldsmith 2491. Attig, Works of John Locke 494. Blaug, Great Economists before Keynes, pp.132-134. Erich Roll, History of Economic Thought, pp.114-118
First edition of John Locke’s first book on economics - Locke’s most important contribution to mercantile and monetary theory. It was an attempt to influence Parliament to defeat a bill to lower the legal rate of interest from 6% to 4% - it was fixed by law at 5% on January 23rd 1692.
“Locke followed William Petty closely in deriving his theory of interest from an analysis of rent. He still regarded rent as the only surplus, and inquired how money, which was by nature barren, could have the same productive character as the soil, which did produce something useful. His conclusion was that just as the unequal distribution of land enabled those who had more than they could cultivate themselves to take a tenant from whom they obtained rent, so the unequal distribution of money enabled its owners to obtain a tenant for it from whom they could receive interest” Erich Roll p.115
“It was, however, Locke’s emphasis on the medium of exchange function of money which was the starting-point for his further discussion. This was based on the quantity theory of money…Against the prevailing mercantilist view that a low rate of interest would raise prices, Locke pointed out that prices were determined by the amount of money in circulation. This view was based on a supply and demand theory of price…Locke, in spite of occasional inconsistencies, held the view that changes in the amount of money were bound to affect prices”. Erich Roll, p.117
The book was published anonymously: “This pre-occupation with anonymity, this inability to be open with the world, his friends or even himself about what he had written and why he had written it, is a trait of Locke’s” Peter Laslett, The Library of John Locke.