Interesting survey of the shadow economy of the United States

books:


	• A Nation of Counterfeiters: Capitalists, Con Men, and the Making of the United States Stephen Mihm Harvard University Press, 2007 - 472 pages average customer review:based on 58 reviews view larger image
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highly recommended

A History Of The Value Of The Dollar

For the first hundred years of our nation's existence there was no federally printed or controlled money. Regional banks printed money, in a variety of styles, some of it very cheaply printed. Not only regional banks printed money. It was so easily done as to be an encouragement for counterfeiting.

This book tells of those counterfeiters, and how some of the counterfeit money actually became to be regarded as more valuable than money printed by banks. In the end, the author makes the point that all paper money is essentially a confidence game. What makes it valuable is not what backs it, as the U.S. dollar no longer has precious metals backing it. It is the confidence of the marketplace and of people in the money that makes it valuable.

A great book. Recommended!

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A Social History of an Economic Phenomenon

For American counterfeiters, the first half of the 19th Century was an age of gold (or should one say "pyrite"?). For most of that period, the United States had no central bank; throughout all of it, the great bulk of the currency in circulation consisted of notes issued by state-chartered banks. Since there were hundreds of these issuers, it was relatively easy to slip bogus notes into the system. Larcenous entrepreneurs were quick to seize this opportunity. Their activities bedeviled merchants and honest bankers. The effort needed to detect counterfeits imposed significant transaction costs on the economy, though phony bills may have benefited areas where currency would otherwise have been scarce. It is remarkable that large scale counterfeiting didn't lead to intolerable inflation and reversion to a barter economy. Rather, the U.S. economy grew briskly in the long run, interrupted by the occasional panic and recession.

Mr. Mihm's book describes and analyzes what might be called the "social" element of counterfeiting: who the counterfeiters were, how they printed and distributed bills and evaded law enforcement, what businessmen and the government did in response, how the public viewed the contest. In doing so, he brings to light a great deal of forgotten history, full of colorful characters and fascinating events. On the economic side of the story - the actual effects of counterfeiting on consumption and production - he is silent, except for off-hand sniping at the "confidence game" (his term) of capitalism. His book is in no sense a prequel to Friedman and Schwartz's Monetary History of the United States, 1867-1960. For what it does, however, it is first rate.

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A Story ABout Our Currency

In the last ten years or so it seems the Americam paper currency has been redesigned at least two times. More colors have been added, flecks added to the paper, and various watermarks and clues in the paper currency make our paper dollars somewhat cryptic.

That's because people counterfeit the Almight Dollar. And with more and more sophisticated printers and equipment being made, the battle to combat counterfeiters is getting harder and harder.

This book looks at the history of our currency we don't often hear about. This book looks at the many ways and methods, past and present, that paper currency of the United States has been counterfeited. In a sense the author blames the government itself for not being so controlling of its economy. Yeah, we can't have that laxity, we need central control. Could it be that, until recently, the dollar was so strong and universally accepted that counterfeiting the dollar was an attractive option?

The book is a rather enlightening look at this aspect of American history and its economy.

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Interesting survey of the shadow economy of the United States

It's hard to imagine a time when the value of paper money was so nebulous that some counterfeits were regarded more highly than legitimate bank notes, but for nearly a century, the United States monetary system functioned in a bizarre netherworld where nothing short of actual specie could be taken at face value.

Libertarians will probably hate this book, because Mihm clearly sees the virtues in a strong centralized government (or bank, in the case of the 1st & 2nd BUS) keeping the nation's currency supply tightly regulated. From the early days of the Republic, up until the Civil War, Mihm paints a picture of a monetary free-for-all where "legitimate" bankers were often as disreputable (or worse) than the criminal counterfeiters. At times, they were one & the same, and honest tradesmen & customers suffered as a result. I cannot even begin to imagine the paranoia that a merchant must have felt whenever a bank note was tendered for goods & services. Good old days, my foot.

Mihm's very entertaining & well-written account is a pretty compelling argument for why complete lack of regulation really is not a good thing. Ask anyone whose livelihood was wiped out by doing business with a shady bank if they thought that perhaps some government regulation of private enterprise might have been in the public good. The end of slavery wasn't the only good thing to come from the Civil War.

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reviews: page 1, 2, 3, 4, 5, 6, 7, 8, 9, 10

Listen to a short interview with Stephen Mihm Host: Chris Gondek | Producer: Heron & Crane

Few of us question the slips of green paper that come and go in our purses, pockets, and wallets. Yet confidence in the money supply is a recent phenomenon: prior to the Civil War, the United States did not have a single, national currency. Instead, countless banks issued paper money in a bewildering variety of denominations and designs--more than ten thousand different kinds by 1860. Counterfeiters flourished amid this anarchy, putting vast quantities of bogus bills into circulation.

Their success, Stephen Mihm reveals, is more than an entertaining tale of criminal enterprise: it is the story of the rise of a country defined by a freewheeling brand of capitalism over which the federal government exercised little control. It was an era when responsibility for the country's currency remained in the hands of capitalists for whom "making money" was as much a literal as a figurative undertaking.

Mihm's witty tale brims with colorful characters: shady bankers, corrupt cops, charismatic criminals, and brilliant engravers. Based on prodigious research, it ranges far and wide, from New York City's criminal underworld to the gold fields of California and the battlefields of the Civil War. We learn how the federal government issued greenbacks for the first time and began dismantling the older monetary system and the counterfeit economy it sustained.

A Nation of Counterfeiters is a trailblazing work of history, one that casts the country's capitalist roots in a startling new light. Readers will recognize the same get-rich-quick spirit that lives on in the speculative bubbles and confidence games of the twenty-first century.

(20070921)

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