Encompassing Interest and Monetary Policy: King Alfred's Recoinage

22 Pages Posted: 27 Oct 2023

Date Written: August 17, 2023


It is well known that a ruler with an encompassing interest will invest in public goods up to the point where his marginal cost equals his marginal benefit. However, the process by which an autocrat transitions from roving to stationary banditry is less clear. The establishment of King Alfred’s throne in the face of the Viking invasion elucidates this process. King Alfred, contrary to average wealth maximizing autocrats, contracted the money supply through two recoinages. Using data on late Anglo-Saxon recoinages and their economic effect, I argue that the contraction solidified Alfred’s power, established a credible commitment to enforcing property rights, and expanded his encompassing interest in the English economy. Alfred’s control of the mints and currency increased his extraction potential and his stake in successful monetary exchange. The policy succeeded, and trade began to flourish in the last quarter of the ninth century.

Keywords: King Alfred, Recoinage, Encompassing Interest

JEL Classification: N13

Suggested Citation

Smith, Nathaniel W., Encompassing Interest and Monetary Policy: King Alfred's Recoinage (August 17, 2023). Available at SSRN: https://ssrn.com/abstract=4587080 or http://dx.doi.org/10.2139/ssrn.4587080

Nathaniel W. Smith (Contact Author)

Sweet Briar College ( email )

United States

HOME PAGE: http://nathanielwsmith.com

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