Topics of coins
The Great Polish Economists – Nicolaus Copernicus
Nicolaus Copernicus (1473–1543) is primarily
known as an exceptional astronomer who
formulated the true model of the solar
system, which led to an unprecedented
change in the human perception of Earth’s
place in the universe. This great Pole, who is
rightly included among the greatest minds
of the European Renaissance, was also
a clergyman, a mathematician, a physician,
a lawyer and a translator. He also proved
himself as an effective strategist and military
commander, leading the defence of Olsztyn
during the Polish–Teutonic War. Later on,
he exhibited great organizational skills, quickly
rebuilding and relaunching the economy
of the areas devastated by the invasion
of the Teutonic Knights. He also served in
diplomacy and participated in the works of
the Polish Sejm.
Copernicus’ scientific achievements in the field of economics were equally significant, and place him among the greatest authors of the world economic thought. In 1517 Copernicus wrote a treatise on the phenomenon of bad money driving out good money. He noted that the “debasement of coin” was one of the main reasons for the collapse of states. He was therefore one of the first advocates of modern monetary policy based on the unification of the currency in circulation, constant care for its value and the prevention of inflation, which ruins the economy. In money he distinguished the ore value (valor) and the estimated value (estimatio), determined by the issuer. According to Copernicus, the ore value of a good coin should correspond to its estimated value. This was not synonymous, however, with the reduction of the coin to a piece of metal being the subject of trade in goods. The ore contained in the money was supposed to be the guarantee of its price, and the value of the legal tender was assigned to it by special symbols proving its relationship with a given country and ruler.
Although such views are nothing new today, in his time they constituted a milestone in the development of economic thought. Additionally Copernicus was not only a theorist of finance, but he was also the co-author of a successful monetary reform, later also implemented in other countries. It was Copernicus, the first of the great Polish economists, who in 1519 proposed to King Sigismund I the Old to unify the monetary system of the Polish Crown with that of its subordinate Royal Prussia.
The principles described in the treatise published in 1517 were decades later repeated by the English financier Thomas Gresham and are currently most often referred to around the world as Gresham’s law. Historical truth, however, requires us to restore the authorship of this principle to its creator, for example through the popularization of knowledge about the Copernicus-Gresham Law.