Berkeley's Ireland was abnormal, indeed unique, in its social structure, its economic and commercial situation, and in its political government. After the Williamite wars seven-eighths of the land of Ireland had passed into the ownership of a few thousand Protestant landlords. The mass of the people were tenants at will of a landlord class whose social power was nearly absolute, for good or evil.

In the Querist Berkeley appealed to this class to develop a sense of social obligation commensurate with their social power. The appeal fell almost, 'but not entirely, on deaf ears. A minority of this class, including Berkeley's friend Thomas Prior, founded in 1731 the Dublin Society, which was incorporated as the Royal Dublin Society in 1750 and still flourishes.

In 1698 and 1699 the export of Irish woollen goods was forbidden. This was one of many similar commercial restrictions. Absentee rents were payable in cash to Irish landlords resident in England. The remittance of these rents necessitated an export trade which the commercial restrictions impeded. Dean Swift, Archbishop King, and others helped to spread the feeling that no.effective step could be taken to remedy economic distress unless these paralysing restrictions were removed.

Berkeley in the Querist sought to overcome and change this mood of inertia. He certainly would not have recommended the setting up of a 'wall of brass' around the kingdom as a desirable national institution, but he considered that if such a wall existed 'our natives might nevertheless live cleanly and comfortably, till the land, and reap the fruits of it' (134, The queries referred to.are numbered as in Vol. VI of the Works of George Berkeley edited by Professor Jessop.) ' Would it not be more prudent,' he queries, ' to strike out and exert ourselves in permitted branches of trade than to fold our hands and repine that we are not allowed the woollen' (73).

As to political organisation: membership of the episcopal.established Church was an essential qualification for full citizenship. The entire Presbyterian body were subject to civil disabilities like the Catholics, though not to the same extent. The so-called Protestant Ascendancy was thus the domination of both Catholics and non-Episcopal Protestants by a minority of a minority. This, ensured the complete dependence of the Irish Parliament and Government on the 'paramount power' in Westminster.

The Irish Parliament might not enact legislation.disapproved of by the British Privy Council, but it was free to reject such proposed legislation. The positive powers of the Irish Parliament were nil. Its negative powers were considerable and, in an atmosphere of unenlightened public opinion, were frequently exercised to resist British.initiatives which would have been to the advantage of Ireland if adopted.

Such an initiative was the proposal to establish a National Bank in 1720. It secured the approval of the King in Council and was at first warmly received by the Irish Parliament. As a result of a pamphlet campaign, and of the prejudice against all joint stock companies, occasioned by the failure of the South Sea Company, the Irish Parliament eventually repudiated the scheme and Ireland had to wait till 1783 before a responsible publicly authorised bank was established. Dean Swift, Archbishop King, and other leaders, or misleaders, of public opinion took a prominent part in the opposition. Berkeley was absent from Ireland from 1713 to 1721(1), but there is evidence that he was not without interest in the scheme.

In connection with the later episode of 'Wood's halfpence', Dean Swift, in his Drapier's Letters, also managed to darken counsel in monetary matters. One of Berkeley's main objects in the Querist was to educate public opinion on these and other matters, and thus give sane policies a chance of success even if they proceeded from a distrusted and suspected paramount British Government. Popular opinion on monetary matters was at that time dominated by Mercantilist ideas. Half a century before Adam Smith, Berkeley, in the Querist, repudiated the fundamental conceptions of mercantilist monetary theory, and substituted a theory of his own which is amazingly modern. Consequently the major permanent interest of the Querist is its contribution to the theory of money and banking. As Berkeley's thought in these matters was conditioned by temporary national circumstance some brief reference to contemporary currency conditions in Ireland is necessary.

No mint operated in Ireland from the time of Edward VI and no regular provision existed for maintaining an adequate supply of coins of different metals and various denominations. Coins of external origin circulated and were given a valuation in terms of a conceptual Irish monetary system to which no actual Irish coins corresponded. From time to time it was found necessary to alter the respective valuations of the different coins. Sometimes, through ignorance or inadvertence, mistakes were made which had the most disastrous effect on the internal currency situation.

It was particularly important for a poor country like Ireland that there should be an adequate circulation of silver coins. Even England found it hard enough to keep silver coins in circulation at this time. If the currency or mint ratio between gold and silver coins exceeds the ratio which in fact prevails abroad, silver coins are exported to command their higher metallic value.

Between 1660 and 1712 there was no serious disparity so far as Ireland was concerned. In that year a new Portuguese gold coin was given a relatively excessive valuation in terms of Irish money. It now became profitable for bankers, brokers, and merchants, to export silver coins and import moidores. When in 1717 the English guinea was reduced to 21s English (thus reducing the English mint ratio) the margin of profit for the export of silver coins from Ireland was widened.

Lord Carteret, who became Viceroy in 1724, realised this, and attempted to bring about a revaluation of Irish currency which would put an end to the drain of silver. In the smoke and stink produced by the Drapier Letters Of 1724 he found it quite impossible.

My authority for this statement is an anonymous pamphlet in the Haliday collection called 'Some reflections concerning the reduction of Gold Coin in Ireland', printed in 1737.

The currency problem was further aggravated in 1725, when the Irish government allowed a gold price of 95s 2d. (Irish) an ounce to a new gold coin called the 'New gold coin of Portugal'. As the English guinea was valued at 93s 3d. and the moidore at 94s 4d, the valuation assigned to the 'New gold coin of Portugal' was altogether out of line with the rest. Not only silver but other gold coins now began to be exported to profit by the differential price.

The technical information about the names, weight, and value of external coins circulating in Ireland at this time is derived mainly from an Essay on Irish Coins published in 1749 by 'James Simon, of Dublin, Merchant, FRS'.

The author of the anonymous pamphlet. referred to above says that in consequence of the mistake made in 1725 there were, in 1737, 70 of these overvalued coins for every 30 moidores and every 5 guineas available in Ireland. He goes on to say:

'The evils of this sort were so great when moidores were the largest pieces among us before the money changers had found out Portugal pieces to exchange even them for, that they roused the Dean, the watchful Dragon that ever wakes to guard the Hesperian gold to roar for a remedy .... What would he not say, when all our silver is gone, and guineas and even moidores are sent away to bring in the accursed thing this Portugal gold, when every broker who sells our commodities abroad ... as soon as he has received sterling silver and gold for them, immediately exchanges it for these light pieces to bring back to his dupes in Ireland. Hereby he lays a tax upon all our exportable commodities of near one shilling in the pound .... the former money trade carried on here upon the disproportion of value in the species of gold coin had greatly multiplied the numbers of merchants and brokers, which has been a double evil to the nation, both by making the returns of money in trade slower and scantier, and by taking off so many hands from our manufactures ... Thus then the question stands. Our gold coin in general was overrated in proportion to silver, and the several pieces of it were disproportionate in value to one another '.

Prior, writing in 1729, made much the same diagnosis. He calculated that in contemporary England there was available. as currency forty shillings per head of population, 13s 4d in silver and the rest in gold, whereas in Ireland there was only 4s 5d. per head, of which 5d. was in silver and the rest in gold. In consequence the stock of money was insufficient and were it not for Bankers' Notes, which we have passing in good plenty, it would be impossible to manage our domestic traffic half as well as we do '(2).

Prior advocated a revaluation of gold and silver coins current in Ireland as near as possible to the proportion of gold to silver in England with the object of removing any temptation to import and export one species rather. than another.

The editions of the Querist published anonymously in 1735, I736, and 1737, strongly advocated such a revaluation of the currency. Berkeley queries (Pt III, 135) 'whether the want of silver hath not introduced a sort of traffic for change, which is purchased at no inconsiderable discount to the great obstruction of our domestic commerce?' He recognised that silver could be got back into circulation either by lowering the valuation of the gold coins or raising the valuation of silver, or by both procedures in some degree. On the whole, he favoured the reflationary method of raising the undervalued coins of both metals to an exact correspondence with the most highly valued gold coin. 'What if our other gold were raised to a par with Portugal gold, and the value of silver in general raised with regard to that of gold? Whether the public ends may or may not be better answered by such augmentation, than by a reduction of our coin? Provided silver is multiplied, be it by raising or diminishing the value of our coin, whether the great end is not answered?' (Pt. III, 150-152).

The currency Proclamation of 1737 substantially improved the situation by reducing the value of gold coins without altering that of silver coins. The English guinea was reduced in value from 23s Irish to 22s 9d. and put more nearly on a level with foreign competitors in the Irish price per ounce of its gold content.

It is reasonable to suppose that the first editions of the Querist helped to bring about this desirable change in the currency position and that the scarcity of silver :money was relieved.

But Berkeley was interested in a much more fundamental reform. He advocated the establishment of a nationally owned bank, what we would call a nationally owned banking system. In this respect he is certainly in advance of, perhaps one should say outside the Pale of, anything which is generally accepted by orthodox Economists or practised in the countries of Western Europe.

The national bank he proposed was to issue legal tender convertible notes as low in value as one pound and provide also a 'compte en banc' which seems to refer to a cheque operated system of deposit banking. The existence of such a bank would, he argued, to some extent supply the 'defect of coin'. (227).

It is not clear how a scarcity of silver coins could be remedied by bank notes of a minimum denomination of one pound. He had in mind especially the desirability of economising 'our small sum of cash'(577) and perhaps he felt that a bank prepared to redeem its notes in either gold or silver at a suitable ratio would attract silver from private hoards and thus bring it back into general circulation(425).

Elsewhere Berkeley shows a clear awareness of the need for small change of copper and silver. He recommended the establishment of a national mint for this limited purpose and queried 'If we had a mint for coining only shillings, sixpences, and copper money, whether the nation would not soon feel the good effects thereof?'(485).

The bank's notes, he held, should be issued only in limited quantities with due regard to the expansion of trade and industry which they facilitated (Pt II, 124). They should be convertible and a constant care should be exercised to keep them at par (Pt. II, 123), but if 'the specie should fail' they would nevertheless pass, 'being admitted in all payments of the public revenue' (Pt I, 250).

So far as foreign payments were concerned, he held that '..our foreign credit doth depend on our domestic industry and our bills on that credit' (494). He even went so far as to maintain that 'we may maintain a much greater inward and outward commerce, and be five times richer than we are, nay, and our bills abroad be of far greater credit, though we had not an ounce of gold or silver in the whole island.'(450).

What Berkeley meant here was that what really maintains the external value of a nation's currency is a favourable balance of payments on current account. If he were alive to-day he would be in order in pointing out that Britain was able to maintain the external value of sterling up to 1914 with a gold reserve of about £30 millions, because the balance of payments was uniformly favour-able. Nowadays with a gold reserve of £500m the free convertibility of sterling remains an insoluble problem, because that fundamental condition does not obtain.

Berkeley's whole conception of money was diametrically opposed to currently accepted mercantilist views. An export trade which resulted in a net import of 'treasure' was the great mercantilist objective. 'Foreign trade fattens the natives while domestic trade only provides them with sustenance'.(3)

These ideas were afterwards exploded by Adam Smith, but already in the Querist their fundamental absurdity was demonstrated. Berkeley queries (283) 'Whether a discovery of the richest gold@ mine that ever was, in the heart of the kingdom, would be a real advantage to us?' Further he queries (559-56o) 'Whether he must not be a wrong headed patriot or politician; whose ultimate view was drawing money into a,country and keeping it there? Whether it be not;evident that not gold but industry causeth a country to flourish?'

In Berkeley's view the psychological impulse to produce wealth is the desire to consume coupled with a willingness to exert oneself in. productive industry. In an exchange economy of specialised producers, money, in appropriate denominations, is absolutely necessary. By its effect in 'oiling the wheels of commerce' it promotes an increase of production and consumption. So far as internal commerce is concerned it does not in the least matter of what the money consists. Paper money, supported and guaranteed by the taxing power of the State, will serve the purpose as effectively as the precious metals and much. more economically (226).

The Querist was widely read and ran through many editions published in all. three kingdoms. It must be presumed that Adam Smith as well as Hume read it, and the former in particular reproduces many of its essential ideas. 'Consumption is the sole end and purpose of all production.... But....the mercantile system seems to consider.production, and not consumption as the ultimate end and object of all industry and commerce'(4). So, too, Berkeley finds the origin of wealth in the desire to consume. He queries (107) 'whether comfortable living doth not produce wants, and wants industry, and industry wealth?'

Adam Smith was writing in a social environment in which the labouring poor were not impoverished, degraded and exploited to the extent that they were in Berkeley's Ireland. His remedy of laissez-faire and the universal pursuit of individual self-interest seemed to him to be socially safe as well as economically adequate for the furtherance of increasing wealth production. But to Berkeley living in a different environment it seemed no less necessary that a more equal distribution of :wealth should. be achieved. Only increasing mass consumption would stimulate a general increase in the objects of its satisfaction.

Here we have foreshadowed the economics of Full Employment and the Welfare State, but Berkeley's appeal was not primarily to the State but to the true depositories of social power: the squires. He did indeed advocate the taxation of.luxury imports consumed only by the rich, but in general his appeal is to the well-to-do classes to exercise their economic power in a spirit of social justice and with a sense of social :obligation. He queries(355) 'Whether the way to make men industrious be not to let them taste the fruits of their industry? And whether the labouring ox should be muzzled?' So too he queries (158), 'When,.the root yieldeth insufficient nourishment, whether men do not top the tree to make the lower branches thrive?'

Adam Smith would have agreed with Berkeley that '...our foreign credit doth depend on our domestic industry'(494) and that ' keeping our cash at home, or sending it abroad, just as it most serves to promote industry, is the real interest of every nation'(566). But neither Smith nor Hume realised the handicaps under which a country like Ireland was suffering in struggling to emerge from a barter to an exchange economy without an adequate supply of small change and subject to the continuous drain of absentee rents. Hume speaks of paper as 'counterfeit money' and considers that it is the interest of the sovereign to have provisions and labour progressively cheaper in such a situation because this furthers the growth of commerce and industry. Compared to Berkeley this is a retrograde point of view(5).

With truly modern prescience Berkeley argued that the mere provision of paper money in an economy suffering from monetary stringency will actually promote a real increase of consumable wealth. Adam Smith held that scarcity of money can never be a limiting factor in the production and exchange of goods. 'The quantity of money, therefore, which can be annually employed in any country must be determined by the value of the goods annually circulated within it.' Any surplus money, in the form of the precious, metals, must necessarily be sent abroad and '....employed in purchasing consumable goods which may be of some use at home'(6).

In Keynesian language Adam Smith regarded money as a 'dependent variable'. The quantity of money will always adjust itself to the volume of production and exchange. Berkeley held that in the Ireland of his day goods were a dependent variable and an addition to the monetary supply was a necessary condition of an increase in the volume of production and exchange.

The principal use of paper money, according to Adam Smith, is to replace, 'a very expensive instrument of commerce with one much less costly, and sometimes equally convenient'(7). The addition of paper money to an existing circulation of metallic money, since '...the annual produce of a country cannot be immediately augmented by these operations of banking...' will have the immediate effect of causing the export of an equivalent amount of metallic money(8).

Possibly this was the case in eighteenth century Britain. Berkeley's Ireland (apart from the drain of absentee rents) was compelled by external circumstances to be relatively self-contained. The growth of internal commerce was impeded by shortage of money. If Berkeley's national bank had been established, in so far as it stimulated a growth of internal commerce without increasing imports or diminishing exports, no efflux of the precious metals would have been occasioned even in the short run. From a long term point of view, in so far as it promoted a real increase of wealth, it would have strengthened export capacity and reduced dependence on certain types of imports.

It is implicit in Berkeley's view that he would have contemplated with equanimity a situation in which all internal commerce was financed by convertible notes (with the necessary supplement of small change). The volume of this internal fund of paper money could, he thought, exceed many times the amount of the precious metals which it was necessary to keep in reserve for maintaining the par of exchange and meeting temporary deficiencies in the balance of payments.

If it be objected that Berkeley did not foresee the possible effects on relative prices and convertibility of a large expansion of internal money, the answer is that Berkeley had in mind the use of the taxing power of the state to restrain undesirable consumption and restrict inflationary rise of prices. In fact he suggested that the capital funds to initiate the bank should be acquired, not by public borrowing but by what we would call 'progressive' taxation.

He queries 'Whether, therefore, a tax on all gold and silver in apparel, on all foreign laces and silks, may not raise a fund for the bank, and at the same time have other salutary effects on the public?'(Pt III, 117). In thus foreseeing the function of public taxation in helping to preserve monetary stability Berkeley was thoroughly modern.

In the fiscal context of strict public finance Berkeley held that the volume of paper money for internal circulation might be a large multiple of the cash reserve. Adam Smith, on the other hand, maintained the now discredited view that '...the whole paper money of every kind which can easily circulate in any country never can exceed the value of the gold and silver of which it supplies the place..'(9).

The whole subsequent history of banking, in all mature economies, has vindicated the contention of Berkeley and refuted that of Adam Smith.

The secret of Berkeley's influence on his fellow-Irishmen in his own day and on national leaders in later ages is to be found as much in his personal character as in his intellectual. achievements.

He was one of the first members of the 'Ascendancy' class who thought of the oppressed victims of the Penal Laws as fellow-citizens and fellow-Christians.

One of his most significant queries, in this connection is that in which he asks 'Whether a scheme for the welfare of this nation should not take in the whole inhabitants? and whether it be not a vain attempt to project the flourishing of our Protestant gentry, exclusive of the bulk of the natives?'(255).

In 1749 the Bishop of Cloyne, as he then was, dared to address an exhortation to the Roman Catholic Clergy of Ireland in 'A word to the wise'. In the course of his introductory remarks he writes: '...I am your well wisher. I consider you as my countrymen, as fellow-subjects, as professing belief in the same Christ.' The pamphlet contains some criticisms of national character which, proceeding from a less charitable source, 'might have caused resentment. Nevertheless the Roman Catholic clergy of the diocese of Dublin, so far from resenting his remarks, published a letter in which they thanked the 'worthy author' and assured him that his pamphlet ' n every page contains a proof of the author's extensive charity.'

It is hardly an exaggeration to say that, since Berkeley's time, every national leader who had a comprehensive concept of Irish nationhood, was influenced consciously or unconsciously by the spirit of George Berkeley. It can be traced in the Proclamation of the Republic in 1916, in which occurs the significant phrase, 'cherishing all the children of the nation equally'.

John Mitchel, Thomas Davis, Isaac Butt, and in our own day Arthur Griffith, George Russell; and Eamon de Valera, have frankly recognised the debt the nation owes to the heart as well as to the head of this great Irishman.

In his attitude to the social and economic problems of his age Berkeley was a controversialist whose intellectual acumen was equalled only by his human sympathy, and the all-embracing charity of his soul. We do homage to the intellectual brilliance of the author of the Querist which still has a certain relevance to the problems of to-day, and a worthy place in the stream of economic thought. Moreover the personal character of the author commands our love and veneration, and perhaps helps to explain the continuing influence of his 'still small voice' in our national affairs.

Notes and References

Some navigational notes:

Copyright Dr Roy Johnston 1999