Coinage debasements in pre-industrial Europe, despite their frequency and especially their severity during the late medieval guerres monétaires, and despite their often important economic consequences, remain a subject that is often mentioned but remains ill understood in the economic history literature. Indeed, one often-cited article, aptly titled ‘The Debasement Puzzle’ (1996), by three highly respected economists, sought to demonstrate that coinage debasements were both impractical and economically futile. Yet debasements continued to ‘plague’ Europe until the eighteenth century. The objective of this study is to demonstrate that they were both practical and often quite effective in their often very different goals, and were not always so deleterious in their effects as is traditionally portrayed.

Medieval Coinages and their Relation to Moneys of Account

The nature, techniques and economic consequences of European coinage debasements must be understood first in relation to the local money of account system for that coinage. In medieval and early-modern western Europe (except for the Iberian peninsula and parts of Germany), most local moneys of account were based upon the system that was established under Charlemagne, c.795. It was directly linked to the new Carolingian pound weight of fine silver (489.51 g) in that the pound money of account was given the precise value of this weight of fine silver. Obviously no silver coins weighing a pound were struck; and for centuries, the only silver coins struck were the various regional pennies (and their subdivisions). Solely for accounting purposes, in reckoning prices, wages, values, etc., the pound money of account (libra, livre, lira) was subdivided into 20 shillings (based on the Roman gold solidus), which in turn were subdivided into 12 pence (based on the Roman silver denarius), so that this pound of account always consisted of 240 currently circulating silver pennies. Not until the thirteenth century did some Italian city-states and then France introduce heavier weight silver coins, known as grossi or gros. The primary reason for issuing such larger, ‘full-bodied’ coins was the deterioration in the silver contents of the original penny through the ensuing centuries of almost universal, if periodic coin debasements, and the consequent rise in prices in each region's silver-based money of account.