Why Economics started in 1776

-Money and trade had been around like, forever, so why did we only get a discipline of Economics in 1776?
-We needed government policy creating markets, like England was doing at the time. Beyond laws and police, they were also implementing monetary policy pegging the value of currency to silver but by only “pegging” and not directly using, they were also greatly increasing the money supply
-That required careful regulation of the banks supplying paper money. France and Sweden had already tried creating state-supported central banks, but they failed because they let the currencies get too speculative. So theorists of Smith’s day felt pegging money to precious metals was the answer

History of Myth of Barter

-Adam Smith used it in 1776 to create discipline of economics as a moral philosophy professor
-Aristotle used it in 330BC, speculating that families must have started by producing everything they needed themselves, then gradually specializing and trading, so money naturally developed to make trade easier
-During age of exploration barter stories disappeared because everyone was discovering old-fashioned tribes and weren’t none of them bartering. “Most sixteenth- and seventeenth- century ravelers in the West Indies or Africa assumed that all societies would necessarily have their own forms of money, since all societies had governments and all governments issued money.”
-Back to Smith: he vigorously objected to idea governments create money. Following in John Locke’s footsteps. Locke thought Govt begins in need to protect private property and operates best when limited to that. Smith added that property, money, and markets were older than political institutions, and were the very foundation of human society. If govts “should play any role in monetary affairs, it should limit itself to guaranteeing the soundness of the currency. It was only by making such an argument that he could insist that economics is itself a field of human inquiry with its own principles and laws– that is, as distinct from, say, ethics or politics.”

pg 24-5