Credit for Alchemy

In the seventeenth century, there was a shortage of circulating money. One solution was to debase one’s coin, an infamous incident in the prior century being Henry VIII’s replacing the amount of gold and silver with cheaper metals. (Henry had an extravagant lifestyle and also needed to funds his wars.) A decreased influx of precious metals from the Americas and other parts of the world exacerbated the situation. One solution to the problem was to make more gold those cheaper metals via transmutation – the promise of alchemy! Thus, European courts and kings retained the services of alchemists in the hope of improving the state’s financial situation and turn the economy around.

 

I’m learning about this history after stumbling on an article with an intriguing title: “Credit-Money as the Philosopher’s Stone: Alchemy and the Coinage Problem in Seventeenth-Century England.” The author is Carl Wennelind and the citation is History of Political Economy 2003, 35, 234-261. As a chemist who’s interested in history, I’ve read a fair bit about alchemy and the philosopher’s stone. I also discuss the role of the alchemists as forerunners to the chemists and how we define chemical elements, on the first day of my introductory chemistry classes. I had never previously considered the influence it might have had on political economy.

 

Wennelind briefly describes historical landmarks in the alchemical tradition, leading to Francis Bacon and subsequently the Hartlib Circle. I’d never heard of Samuel Hartlib, but apparently his group “served as a link between Gresham College – the first systematic effort in England to apply scientific lessons to the practical affairs of the state and the demands of commercial expansion – and the Royal Society.” Robert Boyle and Benjamin Worsley were members; and the group was known as the “invisible college”, a precursor to the Royal Society’s formation.

 

The alchemists did not succeed in turning cheap metals into gold, despite the efforts of Worsley. Thus, the Hartlib circle turned to the idea of “setting up a land bank that would issue credit-money on the security of the land.” The idea was that “land is the most concrete and stable of commodities” and while you’d think “the banking sector was the most appropriate institution for the development of this kind of credit-money scheme”, Hartlib argued that such “deposit banks” were essentially pawn shops and thus limited in increasing the circulation of money. One member of the Hartlib Circle “advocated for the creation of a merchant bank that would issue promissory notes for domestic circulation” (i.e., essentially paper money in function) by making an analogy to alchemy, even referring to such credit-money as the philosopher’s stone.

 

Another reason why the land bank may be preferable to alchemy was that the money would not be debased if the alchemy was successful and large quantities of gold flooded the market. Land, in this sense, was more concrete than gold at least as a measure of security. Hartlib’s specific idea did not ultimately come to fruition, but by the end of the seventeenth century, the Bank of England was founded to pay for (via credit-money) the building of the British naval fleet. (The close ties between monetary-debt systems and war has been amply argued by David Graeber in his masterful treatise.) Alchemy on the other hand fell further by the wayside, no longer needed by monarchs and business titans. And with the rise of science as a distinct methodological suite, the death knell of alchemy was assured. I give alchemy credit for staying alive as long as it did.