Nicole Oresme: Treatise on the Origin, Nature, Law, and Alterations of Money

In the Middle Ages, it was common practice among rulers to secretly reduce the material value of coins. Without adjusting the nominal value, they had coins produced with a lower precious metal content in order to profit financially. The resulting inflation was usually borne by the lower classes. In addition, with the commercial revolution of the 13th century, the monetary economy finally became fully established in Europe, and coinage became an integral part of everyday life. Taxes increasingly had to be paid in money rather than in kind. During the same period, Aristotle's writings spread throughout late medieval Europe through Latin translations, including his treatise on monetary theory. On this basis, the French bishop, mathematician, and physicist Nicole Oresme (before 1330–1382) wrote his Treatise on the Origin, Nature, Law, and Alterations of Money around 1358. Like his ancient predecessor, he did not attribute any intrinsic value to money. It only acquired value through its social use. His explicit criticism of the rulers' practice of debasing coins was of historical significance and had a considerable influence on the discourse on monetary policy. He held the revolutionary view that the value of money should be determined not by the sovereigns, but by the people itself. Changes in value should only occur in cases of absolute emergency. These ideas were still extremely influential in the 15th century for subsequent scholars such as Gabriel Biel (before 1410–1495), who further developed Nikolaus's ideas. The manuscript of the treatise, created around 1485 and now held in the Bibliothèque Nationale de Paris, is a wonderful testimony to the relevance that the work still had more than a century after its creation.