Coin Debasement and the “Great Divergence”: A Research Note

Coin debasement as an omnipresent premodern monetary phenomenon has long been recognized. Yet, until recently, debasement was dealt with on a national or at-best continental level. To be precise, it was not sufficiently understood what role seigniorage played in financing early modern polities in comparative terms across Eurasia. Centering on China, particularly at times of war, this research note is the first step toward such an endeavor. It finds that seigniorage was generally lower in China than in early-modern Europe. It also finds greater tolerance for the concurrent circulation of old and new coinage in China. In China, coinage was conceived of in imperial nomenclature as a “public good” of sorts; one that the central government must provide largely at its own expense and even at a net loss in order to facilitate commoners’ livelihood.