"Monetae cudendae ratio" (also spelled "Monetæ cudendæ ratio"; English: "On the Minting of Coin" or "On the Striking of Coin"; sometimes, "Treatise on Money") is a paper oncoinage byNicolaus Copernicus (Polish: Mikołaj Kopernik). It was written in 1526 at the request ofSigismund I the Old,King of Poland,[1][2] and presented to thePrussian Diet.
Copernicus' earliest draft of his essay in 1517 was entitled "De aestimatione monetae" ("On the Value of Coin"). He revised his original notes, while atOlsztyn (Allenstein) in 1519 (which hedefended against the Teutonic Knights), as "Tractatus de monetis" ("Treatise on Coin") and "Modus cudendi monetam" ("The Way to Strike Coin"). He made these the basis of a report which he presented to the Prussian Diet atGrudziądz (Graudenz) in 1522; Copernicus' friendTiedemann Giese accompanied him on the trip to Graudenz.[3] For the 1528Prussian Diet, Copernicus wrote an expanded version of this paper, "Monetae cudendae ratio", setting forth a general theory of money.
In the paper, Copernicus postulated the principle that "bad money drives out good",[4] which later came to be referred to asGresham's law after alater describer, SirThomas Gresham. This phenomenon had been noted earlier byNicole Oresme, but Copernicus rediscovered it independently. Gresham's law is still known in Poland andCentral andEastern Europe as the Copernicus-Gresham Law.[5]
In the same work, Copernicus also formulated an early version of thequantity theory of money,[2] or the relation between a stock of money, its velocity, its price level, and the output of an economy. Like many laterclassical economists of the 18th and 19th centuries, he focused on the connection between increasedmoney supply andinflation.[6]
"Monetae cudendae ratio" also draws a distinction between theuse value andexchange value ofcommodities, anticipating by some 250 years the use of these concepts byAdam Smith—although it, too, had antecedents in earlier writers, includingAristotle.
Copernicus' essay was republished in 1816 in the Polish capital,Warsaw, asDissertatio de optima monetae cudendae ratione (Dissertation on the Optimal Minting of Coin), few copies of which survive.[7]
Copernicus Moneta.
