The following article was written by Clifford F. Thies and appeared on the web site of the Ludwig von Mises Institute.

It used to be that every economist worth his salt knew Gresham’s Law (or, if he was Polish, Copernicus’s Law): “bad money drives out good.” Narrowly understood, this rule says that when the government requires people to accept different forms of money at an exchange rate fixed by law, the form of money that is overvalued (the “bad money”) will circulate, while the form of money that is undervalued (the “good money”) won’t.

Now comes a new translation of the plays of Aristophanes by Paul Roche, among them “The Frogs,” which has the oldest known expression of this rule:

You know what I often think:
We treat our best men
The way we treat our mint
The silver and the golden
We were proud to invent
These unalloyed
Genuine coins, no less,
Ringing true and tested
Both abroad and [in] Greece
And now they’re not employed
As if we were disgusted
And want to use instead
These shoddy coppers minted
Only yesterday
Or the day before
(as if that matters).
(Aristophanes: The Complete Plays, trans. Paul Roche, New American Library, 2005, p. 573)

In “The Frogs,” two citizens of Athens descend into Hades for the purpose of resurrecting two well-respected politicians of the past to save the city-state from its current, corrupt rulers. The current rulers are said to be like the base-metal coins in circulation, while the rulers of the past are like the full-bodied, precious metal coins that formerly circulated.

The full-bodied coins “rang true”; that is, when flipped onto a solid wooden table, they gave out a distinctive ring. Think of Edgar Allen Poe’s “The Bells.” The heft, feel, and tone of the coins were sufficient, for most purposes, to distinguish a counterfeit from the genuine article. And these coins circulated abroad as well as at home because they had intrinsic value. In contrast, the debased coins were impossible to distinguish from any counterfeit, since they had no distinctive qualities, and were repugnant to foreigners and anyone else not compelled by law to accept them, just like current politicians.

The passage doesn’t actually say how the base-metal coins came to replace the full-bodied coins. Nevertheless, we can infer that the audience knew what had happened, since the play was a comedy, not an economics lecture. From historical sources, we know that Athens had been involved in a series of wars against Sparta and other Greek city-states, and that it was threatened by Persia.

The continuing expenses of these wars depleted Athens’s treasury. Even the gold and silver objects at the temple were melted and recast as money. Then the city resorted to debasement and to legal-tender laws compelling acceptance of the debased coins at the values of precious-metal coins. Soon, the coins were recast only with base metal.

The story of debased coins and their connection with fiscal imbalance and corruption is perennial. The prophet Isaiah (1:22) writes “Your silver has become dross, your wine diluted with water.” Dross is base metal. The silver coins that had formerly circulated had come to be replaced by coins of base metal. The base metals might be polished so as to look like silver, as in the case of many contemporary US coins, but this only hides the corruption that would otherwise be manifest in the coins.

Similarly, the Islamic scholar Ibn Taymiyyah (who can be viewed as a forerunner of Wahhabism) wrote, at a time of continuing warfare against Christians to the west and Mongols to the east, “If the ruler cancels the use of a certain coin and mints another kind of money for the people, he will spoil the riches which they possess.” Like Isaiah and Augustine, Ibn Taymiyyah wrote at a time of decline in his civilization and called for revival and separation from the world.

Speaking of the Mongols, it is to the Emperor Kublai Khan that we owe the invention of paper money. Marco Polo, who brought the news of this innovation to the Europeans, wrote in his travelogue, “nor does anyone, at the peril of his life, refuse to accept it in payment.” During the later years of Kublai Khan’s reign, the issues of paper currency became excessive, and an inflationary cycle got underway.

During the reign of his successor, the fourth Mongol emperor, the world’s first “currency reform” was undertaken, with a forced conversion of the old currency for the new at the rate of five to one. The former prosperity was also replaced by corruption and decline.

Upon the overthrow of the Mongol dynasty in the 13th century, and the ascension of the Ming dynasty in China, history recorded yet another milestone in the evolution of money, the first inscription of a legal-tender law onto paper money: “This paper money shall have currency and be used in all respects as if it were copper money.” At the beginning of the Ming dynasty, 17 units of paper money were the equivalent of 15 units of copper money. By the 15th century, 5,000 units of paper money were the equivalent of 15 units of copper money. Economic conditions deteriorated, and the empire suffered incursions by the Tartars.
Our own country’s experience with legal-tender laws goes back to the colonial days, when the colonies issued paper money then known as “bills of credit.” The first issue was by the Massachusetts Colony in 1690, during King William’s War, when the English colonists of Massachusetts thought to outfit an expedition to take Quebec, then a French colony. The bills were inscribed, “This indented bill of Five Shillings … shall be in value equal to Money.”

Soon after this war came Queen Anne’s War and another issue of bills of credit. Then came another war whose name escapes me just now, and then yet another. Each time, more bills of credit. And, of course, accompanying all these Bills of Credit was inflation.[1]

During mid-century, the English limited the ability of the American colonies to issue bills of credit, and the inflation was ended. Later in the 18th century, the American colonies chafed under the burden of this British constraint on issuing paper money. This constraint was among the grievances referred to in the Declaration of Independence. According to Benjamin Franklin, it was the primary one. And so they had a revolution.
Freed of the outside constraint on issuing paper money, guess what? As is obvious to everyone who does not prostrate himself before the throne of big government, there was inflation. And to compel acceptance of the paper money, guess what? Those not accepting the paper money being issued by each of the self-proclaimed independent states or by their Continental Congress were to be treated as Loyalists and have their property seized.

So, in view of the inflation that burst out during the Revolution and Confederation periods, there was called a convention for the purpose of drawing up a new agreement among the states. This agreement, among other things, limited the ability of the state governments to issue paper money and did not grant such a power to the federal government. What is remarkable about the constitution that they drew up is not that it only restrained the issue of paper money for a certain number of years (until the United States got into the cycle of war, deficit spending, inflation, corruption, and decay), but that it restrained the issue of paper money for as long as it did.

So let us, with the same cruel humor, make fun of our condition as Americans the same way Aristophanes did of the condition of Athenians. Let us send a delegation to Hades to resurrect Ludwig von Mises, Thomas Jefferson, John Locke, and Aristotle to replace the corrupt, debased politicians we now have.
Clifford F. Thies is the Eldon R. Lindsay Chair of Free Enterprise at Shenandoah University in Winchester, VA.

[1] During one of these wars (does it really matter which?) came yet another first in the history of money: the first use of a price index to try to deal with inflation. By contemporary standards, it was a crude index. Only the prices of four commodities were involved.
Gerard V. Bradley – Law, Notre Dame Law School
Robert P. Hunt – Political Science, Kean College of New Jersey
William P. Luckey – Political Science, Christendom College
Robert F. Cuervo – Political Science, St. John's University, Staten Island
Kenneth L. Grasso – Political Science, Southwest Texas State University
by Kenneth L. Grasso
At its 1996 Meeting at Franciscan University, the Society of Catholic Social
Scientists (SCSS) presented its annual "Pius XI Award for Contributions
Toward the Building Up of a True Catholic Social Science" to Francis
Canavan, S.J. The Society's decision to present Father Canavan this prestigious
award, like that several years ago of the Fellowship of Catholic Scholars
to present him its Cardinal Wright Award, represents some much deserved and
long-overdue recognition of Father Canavan's many years of loyal and selfless
service to the Church and the important contribution which his work has made
to Catholic intellectual life in contemporary America.
Born in 1917, Father Canavan received his primary and secondary education
in the public schools of New York City and Long Island. (Canavan not only
attended the same elementary school which had educated another future Jesuit,
John Courtney Murray, some fifteen years earlier, but also graduated from
Lawrence High School with Harry V. Jaffa and Joseph Cropsey, both of whom,
like Canavan, went on to become prominent political theorists). He received
his B.S. and M.A. degrees from Fordham University in 1939 and 1947, his
Ph.L. from St. Louis University in 1944 (where he met a fellow alumnus of the
"Jamaica Model School" John Courtney Murray, who subsequently became a
friend and major influence on Canavan's own work), his S.T.L. from
Woodstock College in 1951, and his Ph.D. from Duke University in 1957. He
entered the Society of Jesus the same year he received his B.S. and was
ordained in 1950.
In the course of his career he has taught at Regis High School (1944-1945),
Canisius College (1945-1946), St. Peter's College (1950-1956) and Fordham
University (1966-1988). From 1960 and 1966 he served as associate editor of
America. Since 1988 he has been professor emeritus of political science at
While at Duke Canavan studied with John H. Hallowell. One of the nation's
leading political philosophers, Hallowell, an Episcopalian, wrote from an
unapologetically Christian perspective and sought to articulate a theory of politics
rooted in the Christian vision of man. Like Murray, Hallowell subsequently
became a friend and exerted a profound influence on Canavan's intellectual
development. While studying with Hallowell he developed an interest in the
political thought of Edmund Burke, whose conception of political reason
became the subject of his doctoral dissertation. Published in 1960 by Duke
University Press, The Political Reason of Edmund Burke was followed by two
subsequent volumes on Burke's thought, Edmund Burke: Prescription and
Providence (1987, Carolina Academic Press) and The Political Economy of
Edmund Burke (1995, Fordham University Press). No less an authority in the
field than Peter J. Stanlis has remarked that Canavan's work has earned him "a
very high permanent place of honor among Burke scholars, living or dead."1
At the risk of oversimplifying, Canavan's writings on Burke might be said to
focus on restoring Burke to his rightful place among the pantheon of
Christian political thinkers. Burke, he demonstrates, is no mere party hack.
Nor is he, as is sometimes asserted, a Humean, utilitarian, cultural relativist
or historicist precursor of Hegel. On the contrary, "Burke did his political
thinking within the framework of a 'realistic' metaphysics derived from the
biblical and Christian doctrine of creation."2 Indeed, at the heart of Burke's
thought is the vision of a divinely created and "teleologically" ordered universe,
"composed of creatures with distinct natures serving natural ends,
subject to natural laws, and all directed to the ultimate purpose of the
Creator," and whose "intelligible order [was] accessible to human reason."1
Yet, if the focus of Father Canavan's work has been the recovery of the
authentic Burke, it is at the same time obvious that his interest in Burke is not
purely historical in nature. He shares Alfred Cobban's view, that as "a school
of statesmanship," Burke's work possesses "permanent value."4 Burke's writings,
he contends, offer us "a richer and fuller way of understanding" political
life "than one founded on the sovereign individual and his rights."5
Simultaneously, Burke's "profound and luminous mind" offers us "a way of
thinking about politics . . . and its problems which makes it possible to
approach them rationally, while avoiding both unprincipled expediency and
doctrinaire idealism."6 Thus, although "Burke is not a major figure in the
history of political philosophy" his work nevertheless teaches many lessons
that contemporary America needs badly to learn.7
If Burke's work has been Canavan's primary interest, it has hardly been his
only one. His writings include an acclaimed study of the political theory of the
freedom of speech (which was named to Choice's, "Outstanding Academic
Book List for 1985"), scores of essays exploring the problem of law, religious
pluralism, and public morality in contemporary America, and numerous essays
exploring various aspects of contemporary Catholic social thought, the
American Catholic scene, and the interaction between Catholicism and
American culture.8 One of the threads that connects each of these areas of his
work is Canavan's utterly uncompromising rejection of liberal individualism
and his ongoing effort to outline a public philosophy for contemporary
America rooted in a richer and sounder model of man and society than that
which informs the liberal tradition.
However much "we may applaud the historical achievements of liberalism"--
its role in breaking "the power of absolute monarchs" and fostering the
rise of "limited, constitutional government"—the liberal model of man and
society, Canavan is convinced, embodies an irremediably flawed theory of
politics and "is now a menace rather than a support of constitutional democracy."
9 "The corrosive acid of [liberalism's] individualism" threatens to dissolve
both the matrix of institutions and the complex virtues and convictions on
which a free society depends for its vitality and ultimately its very viability.
The "better theoretical foundation" that our public life "so badly needs," he
insists, must take its bearings from a "sounder" theory of man than that which
informs liberalism, from an anthropology which sees man "as a social being
from whose nature flow relations to his family, neighbors, fellow workers, the
community and the political order," relations that "are the foundation of both
rights and obligations that are prior to and independent of consent."10
What emerges in these writings is nothing less than a devastating critique of
the liberal assumptions that dominate our public life today (including a powerful
critique of liberalism's pretensions of neutrality and its essentially sectarian
character that long predates the work of Michael Sandel and Alasdair
Maclntyre) and a penetrating examination of the malaise that besets the
American body politic today. One of the most striking aspects of his work on
liberalism and contemporary America's quest for a public philosophy is, as
several observers have noted, its prescience. More than three decades ago, he
was predicting both the moral free fall—proceeding mostly from the collapse
of traditional values and convictions, and the institutions that embody and
transmit them—that has become perhaps the defining feature of contemporary
American public life, and the collapse of liberalism into "mere permissiveness.""
Over the past three decades, as Robert P. George has observed,
Canavan has been the "most incisive and trenchant critic" of "the sectarian
moral agenda of liberal secularism" and the "judicial activism" by which it has
been imposed on the American body politic.12
In conjunction with Father Canavan's receipt of the 1996 Pope Pius XI
Award, a roundtable was assembled at the SCSS's meeting to explore his work.
Of the panel's five participants, four—Professors Cuervo, Grasso, Hunt and
Luckey—studied under Father Canavan at Fordham, while the fifth—Professor
Bradley—is a friend and admirer whose own work has been influenced by
Canavan. Each participant addressed a different aspect of Father Canavan's
work. Bradley explored Canavan's writings on the problem of law, public
morality and religious pluralism in contemporary America; Hunt examined his
critique of liberalism; Luckey analyzed his work on the political theory of what
has come (under the impact of liberalism) to be known as "freedom of expression";
Cuervo provided an overview of his far-ranging writings on Burke; and
Grasso addressed his work on Catholic social thought.
The essays that compose this symposium are based on the remarks that the
contributors delivered at that roundtable. Although this format arguably gives
short shrift to both Canavan's work on Burke (and imposes on Professor
Cuervo the unenviable task of having to summarize the argument of all three of
Canavan's Burke volumes in the brief compass of a single essay) and his writing
on the state of American Catholicism, it has the advantage of providing a
broad overview of all the major aspects of Canavan's work and focusing on
Canavan's own teaching about the proper ordering of political life.
The contributors to this symposium make no effort to conceal their admiration
for Father Canavan and his work. For the reader heretofore unfamiliar with
Canavan's work, the essays composing the symposium make the grounds for
this admiration readily apparent. Canavan's work exhibits a thorough command
of the literature on the subjects it addresses; an extraordinary knack for getting
at the heart of complicated theoretical issues (including the ability to make the
sort of subtle distinctions necessary to come to grips with such issues); and a talent
for articulating complex subjects in a concise and jargon-free manner.
Indeed, Canavan offers us a model of how the Catholic thinker ought to
engage his discipline, and, more broadly, his culture. He does so by uniting a
thorough command of contemporary scholarship in his chosen discipline with a
deep knowledge of, and profound fidelity to, the Catholic intellectual tradition.
Precisely for this reason, Canavan can engage the best scholarship in contemporary
political theory without becoming captive to the horizon within which it
operates. He can recognize, for example, that to reject the liberal theory of religious
liberty is not to reject religious liberty per se. Canavan thus can assimilate
the valid insights that emerge in contemporary political theory, while
retaining the critical distance necessary to evaluate contemporary thought in the
light of the Catholic faith and the intellectual tradition that has emerged under
its aegis. He can learn from Leo Strauss, for example, without becoming a convert
to Straussianism, without uncritically embracing Strauss' reading of intellectual
history and the worldview it presupposes.
"The Catholic mind," Canavan once remarked, "is by nature a synthesizing
mind." As a result, "every thinking Catholic has the lifelong task of harmonizing
his faith with the findings of human reason that are available to him in his
time."13 Father Canavan's work illustrates just how such a mind operates.
His work neither uncritically embraces, nor uncritically rejects contemporary
culture, but rather engages it from the perspective of the Catholic faith,
appropriating what is valid within it and rejecting what is not. At a time
when far too many Catholics confuse engaging the world with abjectly capitulating
to the reigning Weltanschauung, and when the only alternative to such
capitulation is increasingly held to be a sectarian withdrawal from the world
(of the type traditionally associated with certain varieties of Protestantism),
we are truly fortunate to have him and his work available to remind us of just
how the Catholic mind should approach the culture around it. I know I
speak not only for my colleagues in the Society of Catholic Social Scientists,
but for Father Canavan's many students, friends and admirers, in thanking
him for his work and example.
1. Peter J. Stanlis, review of Edmund Burke: Prescription and Providence, in Review
of Politics 50 (Fall 1988): 743-747.
2. Francis Canavan, Edmund Burke: Prescription and Providence, xiii.
3. Ibid., 4, 13.
4. The Political Reason of Edmund Burke, 95.
5. Francis Canavan, "The Relevance of the Burke-Paine Controversy to American
Thought," Review of Politics 49 (1987): 175.
6. The Political Reason of Edmund Burke, 194.
7. "The Relevance of the Burke-Paine Controversy," 175.
8. The "Documentation" section of this journal contains a bibliography of Canavan's
writings. A number of his most important essays on law, religious pluralism and public
morality were collected in The Pluralist Game: Pluralism, Liberalism and the Moral
Conscience (Lanham, Maryland: Rowman & Littlefield, 1995). Pins in the Liberal
Balloon: Sixty Short Essays on the Church in the Modernist World (New York: The
National Committee of Catholic Laymen, 1990) contains some of Canavan's best short
pieces on contemporary American public life and the American Catholic scene.
9. The Pluralist Game, 132-133.
10. Ibid., 134, 133, 137.
11. Ibid., 133.
12. George's remark appears on the back cover of the paperback edition of The
Pluralist Game.
13. Pins in the Liberal Balloon, 52.