Editing Nicholas Barbon (section)

==Economic theory==
[[File:Barbon - Discourse of trade, 1905 - 5845734.tif |thumb|''Discourse of trade'', 1690]]
During the later part of his life, Nicholas Barbon wrote extensively on [[Economics|economic theory]].  His pamphlets and books on [[political economy]] are considered important because of their innovative views on money, trade (especially [[free trade]]) and [[supply and demand]].<ref name="ODNB-Nicholas"/><ref name="Letwin61">{{Harvnb|Letwin|2003|p=61.}}</ref> His works, especially ''A Discourse of Trade'' (written in 1690), influenced and drew praise from 20th-century economists such as [[John Maynard Keynes]] (in ''[[The General Theory of Employment, Interest and Money]]'')<ref name="JHEH-Abstract">{{cite journal|last=Ullmer|first=James H.|date=March 2007|title=The Macroeconomic thought of Nicholas Barbon|journal=Journal of the History of Economic Thought|volume=29|issue=1|pages=101–116|doi= 10.1080/10427710601178336|s2cid=154339143 }}</ref> and [[Joseph Schumpeter]].<ref name="Letwin61"/> Karl Marx cites his work, notably ''A Discourse on Coining the New Money Lighter'' of (1696) in ''Das Capital''.<ref>pp 125-7 in the 1970 Penguin edition</ref> He was one of several late 17th-century economic, social and political theorists with a medical education background; contemporaries included [[Benjamin Worsley]], [[Hugh Chamberlen]], [[William Petty]] and [[John Locke]].<ref name="Letwin48–49">{{Harvnb|Letwin|2003|pp=48–49.}}</ref>

His early writings sought to explain and advertise his insurance and mortgage schemes and his building developments; for example, in his ''Apology for the Builder: or a Discourse showing the Cause and Effects of the Increase of Building'' of 1685—written in the aftermath of his fight with the lawyers of Gray's Inn—Barbon justified (anonymously) his expansionary building policy by describing the benefits it would bring to London and Britain as a whole.<ref name="Letwin55">{{Harvnb|Letwin|2003|p=55.}}</ref> His ''A Discourse of Trade'', written five years later, was much more significant, however. As a broad explanation of his economic and political views, it brought together all of his ideas and became the basis for his reputation as an economic theorist.<ref name="Letwin56">{{Harvnb|Letwin|2003|p=56.}}</ref>

Barbon observed the power of fashion and luxury goods to enhance trade.  Fashion demanded the replacement of goods before they had worn out; he believed this directed people towards the continuous purchasing of goods, which therefore created constant demand.  These views were contrary to standard moral values of the time, influenced by the government and the [[Church of England|church]]. He was one of the earliest writers to draw this distinction between the moral and economic aspects of purchasing.<ref name="ODNB-Nicholas"/><ref name="Letwin63">{{Harvnb|Letwin|2003|p=63.}}</ref>

His views on [[interest]] were praised by [[Joseph Schumpeter]].  Barbon described as a "mistake" the standard view that interest is a monetary value, arguing that because money is typically borrowed to buy assets (goods and stock), the interest that is charged on the loan is a type of [[renting|rent]]—"a payment for the use of goods".<ref name="Letwin61"/> From this, Schumpeter extrapolated the argument that just as rent is the price paid for the use of what he called "unwrought stock, or the ''natural agents'' of [economic] production", interest is the price paid for "wrought stock—the ''produced'' [[Factors of production|means of production]]".<ref name="Letwin62–63">{{Harvnb|Letwin|2003|pp=62–63.}}</ref>

One of the main arguments in ''A Discourse of Trade''<ref name="ODNB-Nicholas"/> was that money did not have enough [[Intrinsic theory of value|intrinsic value]] to justify a government's hoarding of it; policies intended to help accumulate supposedly "valuable" commodities such as silver and gold were not appropriate, because the laws of [[supply and demand]] were the main determiner of their value.<ref name="Letwin63"/> Such criticism of [[mercantilism]]—the view that a country's prosperity can be measured by its stock of [[bullion]]—helped to lay the foundation for [[classical economics]], and was unusual at the time. Along with John Locke, with whom he debated his theories, Barbon was one of the first theorists to argue that money's value was principally symbolic and that its main function was to assist trade.  These views were expanded upon in his 1696 pamphlet, ''A Discourse Concerning Coining the New Money Lighter''.<ref name="ODNB-Nicholas"/><ref name="Letwin63–64">{{Harvnb|Letwin|2003|pp=63–64.}}</ref>

Barbon was influenced by [[populationism]]; he identified a country's wealth with its population. He also advocated the use of [[paper money|paper]] and [[credit money]], and postulated the reduction of [[interest rates]], which he thought impeded the growth in manufacturing and trade.<ref name="Letwin63"/><ref name="Letwin60">{{Harvnb|Letwin|2003|p=60.}}</ref> He discussed these issues in his 1696 pamphlet, which also considered the effects of the [[Great Recoinage of 1696|Recoinage of that year]], in which the [[Royal Mint]] recalled large quantities of silver coins, melted them down and reminted them, resulting in a temporary fall in the supply of money.<ref name="ODNB-Nicholas"/>

Despite the importance of some of his theories, Barbon's work (especially ''A Discourse of Trade'') has been criticised for an excess of "definition and classification" instead of analysis and a disjointed style which lacked rigour.<ref name="Letwin48"/><ref name="Letwin57">{{Harvnb|Letwin|2003|p=57.}}</ref> This has been attributed to the early period in which he wrote, when economic thought was not yet fully developed.<ref name="JHEH-Abstract"/>