Gian Rinaldo Carli (1720-1795): a Remarkable Early 'Money Doctor' [First Draft]

Gian Rinaldo Carli (1720-1795): a remarkable early 'money doctor' [First draft] Gianfranco Tusset 1. Introduction “Some mathematicians maintained that money is like water, which flows and swirls around until it finds its equilibrium again: the matter is totally different, especially in Italy” (Carli 1751, 164-165). This quotation from one of Gian Rinaldo Carli’s main works, Dell’origine e del commercio delle monete e dei disordini che accadono nelle alterazioni di essa (Of the origin and trade of the coins and the disorders that occur in its alterations) (1751), clearly points to his focus on the conditions in which money circulates in order to guarantee the monetary equilibrium. Aim of this paper is to reconstruct the figure of Gian Rinaldo Carli, a monetarist economist who lived in the eighteenth-century, and whose work mirrored contradictions and strains that characterized the decades preceding the industrial burst. Belonging to a community of monetarist economists who enlivened a sort of golden age of the pre-classical studies on money, Carli stood out for is persistent focus on the need of guaranteeing monetary equilibrium, of intervening to assure conditions favorable to enlarge trade, at that time considered the main factor of growth. The paper is structured as follows. Section 2 lingers over the eighteenth-century monetarist community as whole. Section 3 introduces some biographical notes on Gian Rinaldo Carli. Section 4 concerns the method Carli employed to deal with monetary topics. Section 5 presents the Carli's general view on monetary equilibrium. Section 6 reviews his researches on then increasing prices. Section 6 details threats to international monetary equilibrium and potential remedies. Section 7 concludes deepening the Carli’s proposal of money-doctor. 2. The reception of Galilean method Carli can be included among the Galilean economists, a label that require some explanation. Galileo occasionally wrote about economic topics, though they were certainly not particularly relevant, as demonstrated by the fact that economists quoted him for his methodology, not for his economic insights. The sole exception lies in the dilemma concerning the utility and value of diamonds and water, which Galileo considered long before Smith. Sagredo, one of the three known protagonists of Galileo’s Dialogue, blames vulgar people for considering silver and gold precious, and viewing land and mud as base elements, failing to realize that any prince would spend diamonds and rubies to buy land if it were in short supply. Galileo was aware that scarcity was the main cause behind value, and consequently behind prices too: “Abundance degrades things” (1632, p. 256). The problems of value, particularly of the metals used to make money, also attracted the attention of most of the Italian economists of that time: Geminiano Montanari (1633-1687), Gian Rinaldo Carli (1720-1795), Ferdinando Galiani (1728-1797), Cesare Beccaria (1738-1794), Pietro Verri (1728- 1797), and Giambattista Vasco (1733-1796); we can also add two economists who lived in Galileo’s time, Bernardo Davanzati (1509-1606) and Gasparo Scaruffi (1519-84). University of Padua. For correspondence: [email protected] 1 These economists tentatively termed here Galilean because they belonged to scientific circles and academies (the Accademia del Cimento, Accademia dei Pugni, among others) that explicitly followed the great physicist’s method and teachings. The fil rouge linking those circles was their rejection of the approach of Aristotle and the Scholastics, which was abstractly replaced by an experimental method never thoroughly defined when referred to human sciences. It is not easy to sketch the ideal type of Galilean economist, however. What exactly characterizes such an economist? Simply having rejected the Scholastic approach certainly was not enough. The idea of scientific rigor was important but needed to be contextualized. It took several decades for the traits of this ideal type of economist to become apparent.1 A careful reading of these economists’ contributions, which focused mainly on monetary topics, can provide some clarification. On the one hand, Galileo’s rigor was often invoked to justify the adoption of a geometrical method in dealing with practical problems. On the other, Galileo’s imprint was detectable when an economist tried to introduce some primitive form of algorithm to deal with monetary and more generally economic problems. The use of algorithms suggests some mechanism for solving economic problems that avoids the need for any type of moral or ethical, or simply individual, discretionary choice. Evidence of this trait could be seen in the objectivity of Galilean economists’ analyses, and their exclusion of any moral or political considerations. The above idea of an early algorithm emerges more clearly when referred to monetary topics. Quantitative ratios between coins and money represented a first step. It was not true arithmetic applied to monetary relationships, but Carli, Montanari, Scaruffi, Beccaria and Galiani clearly developed their analyses with data and quantitative ratios. Their proofs were built on quantitative demonstrations. Numbers inserted in the literary discourse enabled these economists to make their analyses quantitative and objective, helping them to evade any strictly moral assessments. Was this a legacy of Galileo’s increasingly well-known approach? Not exactly. Certainly, the changing scientific climate drove these authors to make more and more use of data, but this practice seems to have made its appearance even before Galileo’s time. Davanzati’s monetary analysis is proof of this: he may not have employed data in the same was as Carli did later on, but Davanzati undeniably used a quantitative approach. Gasparo Scaruffi also produced a numerical representation of monetary exchanges. Galileo’s message probably accelerated the use of data in monetary analysis, but it would have happened anyway. Galileo’s insistence on the need for scientific rigor and applied mathematics actually favored the encounter between the monetary approach based on pure mathematics and geometry on the one hand, and the commercial use of calculation and numbering on the other. After Galileo, it no longer made sense to distinguish between pure and applied mathematics when referring to monetary studies. The above monetarist economists sought mathematical rigor by taking a concrete, practical approach. Galilean economics grew from the combination of pure mathematics and geometry with calculations applied to technical and practical issues. In this scientific environment, the approach to monetary issues took a political dimension, it was clearly recognized that the management of money was object of princes and governments, of policy, we would say nowadays. 1 For a more detailed analysis of this label, Galilean economists, see Tusset 2018. 2 A visual representation of monetarist economists Figure 1 shows the words characterizing the main works of six monetarist economists who can be considered as “Galilean” in the sense described above. Beside Carli, we can find: Bernardo Davanzati, Geminiano Montanari, Ferdinando Galiani, Cesare Beccaria, and Giambattista Vasco. The figure was obtained using correspondence analysis to emphasize the words relatively most often used in the main works of the above-mentioned economists.2 The linguistic variance was not very high (see values of inertia on the horizontal and vertical axes), meaning that these economists all discussed similar (monetary) issues, and used similar concepts in their analyses. On the other, both the horizontal (25.02%) and the vertical (22.58%) variances suffice to highlight some differences between these economists, though they followed much the same trend. Considering their lexicon, the figure can be divided into four parts, with Ferdinando Galiani placed in the first quadrant, where the markers of his work on money are nonetheless clearly visible: the terms “moral”, “justice”, “rich”, “unfair”, “virtuous”, “virtue”, “usury”, and “usurers” emphasize his ethical conception of value. Moving counterclockwise, Montanari and Davanzati, in the quadrant II, speak about money too, but they stand apart for their use of words referring to the condition of individuals: “useful”, “wishes”, “families”, “equilibrate”, and “happy”, among others. Montanari cannot move too far away from Davanzati, his acknowledged theoretical reference point. Montanari’s studies and works have frequently led him to be associated with Galileo, but in dealing with monetary topics, he went his own way, emphasizing a subjective approach to monetary analysis that makes his texts distinctive from those of other authors. The distance that separates him from Aristotle is also shorter than in the case of other economists. Continuing, we find Carli in the quadrant III. Words such as “seigniorage,” “equilibrium,” “balancing,” “disorder,” “manipulation,” “governments,” “pestilence,” and “eroded” show his interest in the depreciation characterizing the money in circulation. The aggregate phenomenon is represented here by the declared value of coins, which did not correspond to their real value. Political distortions lie behind this phenomenon, which cannot be brought down to a specific cause. 2 The vocabulary represented in a scatterplot that “can be regarded as a map, because the position of each [economist] can be regarded as a two-dimensional position, almost like a geographical location in a region defined by latitude and longitude.

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