This article starts by defining one kind of currency, rather arbitrarily, as "good" and another as "bad", but ultimately concludes that the one labeled "bad" will be the more widely circulated of the two. Since circulation is the whole point of a currency, it seems that we've mislabeled the both -- the better currency is the one that circulates more. My reading of this law is just that valuable commodities make poor currencies. Maybe "good" and "bad" are not the best terms to use here? 24.55.17.191 (talk) 22:48, 18 January 2014 (UTC)
What does mean bad money in this context? --Anonymous
example - It was noted that 8-carbon fuel (octane) worked better in cars than 7-carbon (heptane) that ran up the value, and so it became necessary to label the octane content. When it became known that tetra-ethyl-lead could disguise the low octane levels and greater profits made the rules were passed that hid the real octane levels to octane-like levels, and since lower value fuels were cheaper they pushed actual octane totally out of the market, even as the health costs of lead became ever more obvious.
It is only when another source of great profits shows up in the form of corn ethanol that there is funding to force out the use of lead, when the simple requirement of higher weight carbon was always available, but had no constituency of corruption. The use of corn ethanol of course drives up the price of corn making food more expensive for everyone.
There are of course thousands of other examples (manufacturing profits vs banking profits) (wage pressures,vs unions), etc. But the implication that government intervention is all bad is highly political, when government policing is the only brake to a race to the bottom of the most corrupt, brutal, and abusive, business practices.Dragonwlkr (talk) 16:16, 27 September 2012 (UTC)
In the described situation of gold and fake coins, why would people take the gold coins, melt them down, and sell the gold? They will only get one pound for it, because that's what the gold is worth, and one pound they had to begin with. --AxelBoldt 20:58 Nov 26, 2002 (UTC)
The original point of coinage was the certification of quality in weight and purity. If the coin was stamped by the king those in the market would not have to test all the possibilities in some random chunk of metal. Dragonwlkr (talk) 20:38, 27 September 2012 (UTC)
I removed this passage from the article:
I think this is a misleading parallel. The key point in Gresham's law is that some regulatory power - the government or whoever - decrees that two items of different value ('good' and 'bad' coins, diplomas, etc.) can be used interchangeably. Gresham's law can in fact be reversed by removing the intervention of the regulator - in which case the 'good' coins would drive out the worthless 'bad' coins.
Furthermore, a gold coin is not a public resource in the economic sense - it is generally owned and enjoyed by one person only! The tragedy of the commons is a rather different idea that applies to shared resources. --Enchanter
This page was turning into a tirade against legal tender laws, and its logic was becoming badly distorted. I have removed the POV tone and moved material around to make the logic flow better. I have also completely taken out the following passage, which had been added as a comment on Gresham's Law in reverse. It completely misses the point that was being made, and makes no sense in that context, or anywhere else in the article.
Finally, someone needs to look up apostrophe - "it's" means "it is" not "of it". And, Enchanter, could you date your comments, please? It happens automatically if you just put ~~~~ at the end of your text. Thanks. --seglea 19:14, 6 Sep 2004 (UTC)
Seglea, thanks for your edits. They are a significant improvement on my additions. The article is now considerably tighter then I left it and you have removed the rambling that I am occasionaly prone to when tired. Your NPOV considerations are very good, and I think you were fully justified making your deletions.
One issue I do want to raise is where you substituted "coins" for "money" in one or two places. I see that it may be more grammatically and cohesively correct to make such a change, but Gresham's Law isn't about coinage in particular, but money in general. References to "'good' money" and "'bad' money", in the article, may need to remain that way. Editing them to "'good' coins" and "'bad' coins" in every instance where coins are used as an example does not seem appropriate in this particular article.
Something I have looked at today, which you may wish to review -- I have altered is the definitions of good and bad money. I think that they are clearer now, but may still need some thought.
Also, your comments on the apostrophe are welcome, but again, it is an error I tend to make when I am tired, and has nothing to do with failing to understand the meaning. --Octothorn 05:57, 15 Sep 2004 (UTC)
"In the absence of legal-tender laws, metal-coin money will freely exchange at somewhat above bullion market value. This is not a purely theoretical result, but rather may be observed today in bullion coins such as the Krugerrand (South Africa) and the American Gold Eagle (United States)." I understand that "bullion coins" is not reserved for coins like the Canadian Gold Maple Leaf which is 24k, but the only ones your mention are 22k. I buy Maples and Philharmonics mostly because they are closer to the fine gold composition. Might the comparison be more apt for the coinage premium if you included at least one purer-composition coin? --athanatic 10:27, 11 Nov 2008 (UTC)
When the US half-dollar was reduced in silver content, the quarter and the dime were both similarly reduced at the same time. The difference? Nobody uses half-dollars of any kind in this country anymore. A better example would be to say that the old pre-1965 quarters and dimes are no longer seen much in circulation, because half-dollars of any age are not usually seen anyhow unless you're a collector. --Lurlock 14:23, 29 June 2006 (UTC)
Actually the 1/2 is used some still and is a good example because 1/2s were made from 90% silver, the 40% silver, then clad. —Preceding unsigned comment added by Legacypac (talk • contribs) 17:08, 17 March 2009 (UTC)
US Dimes and quarters also went from 90% silver to silver-clad.Harksaw (talk) 18:54, 17 March 2009 (UTC)
I would also like to bring up that Americans have a tendency to shy away from dollar coins and 2 dollar bills. I believe this to based on the reduced usefulness of the currency do to the fact that it can't be used in vending machines and other places, putting it in the category of bad money. -Mike
I removed the uncited statement that This law was first formulated by Nicolaus Copernicus.[citation needed] The History section of the article refutes that Copernicus was first. Copernicus did precede Gresham, but NC was not first. As for the citation requested (in the general sense)? There are two citations already quoted in the article which indicate that Gresham was not the first to discuss the concept, even though the idea is now eponymously named for him. One that I am familiar with is Spiegel. The other, claimed within the text of the article by another WP editor, with extensive quotations, is Selgin. Enjoy. N2e 23:06, 10 October 2006 (UTC)
The phrasing of one of the sections says the rising price of zinc and copper has led to banning on melting of one and five cent pieces respectively. This implies pennies are made of zinc and five cent pieces of copper. I do not live in America, but I am pretty sure that this is not the case. 24.65.87.238 (talk) 21:33, 15 January 2008 (UTC)
Followup: My mistake, I didn't realize how different pennies in different places were, my apologies.24.65.87.238 (talk) 21:38, 15 January 2008 (UTC)i AGREE
Anyone else find the AA section kinda... creepy? As if theists are good money, and everyone else is a rotten stain on hope? Should this article really be going that direction? --Thomas B♘talk 09:20, 12 August 2008 (UTC)
Shouldn't there be mentioned in the History section, that in fact, Copernicus formulated simillar theory about 70 years before Gresham?? it is, actually mentioned in the Copernicus article83.31.83.43 (talk) 19:59, 14 October 2008 (UTC)
Currently, the second sentence of the introduction is:
Gresham's law applies specifically when there are two forms of commodity money in circulation which are forced, by the application of legal-tender laws, to be respected as having face values in a fixed-ratio for marketplace transactions.
The more typical demonstration of Gresham's law is the case of monies containing different quantities of the same commodity, not of monies containing different commodities. This application should be placed less prominently, and probably reworded. - Crosbiesmith (talk) 17:51, 30 November 2008 (UTC)
I'm removing the market for lemons shinenigans since it affirms that it isn't possible to tell bad cars from good ones. —Preceding unsigned comment added by VTNC (talk • contribs) 14:44, 19 January 2009 (UTC)
It also says sellers always have an incentive to be dishonest. WTF is wrong with you people? VTNC (talk) 14:46, 19 January 2009 (UTC)
I agree that the lemons comparison is appropriate. Full Decent (talk) 13:08, 2 September 2009 (UTC)
The reference on this discussion should be to George Akerlof's 1970 article on lemons where he explains why he is using Gresham's Law as a metaphor (and what he saw as the limitations of that metaphor) to explain how dishonest sellers can drive legitimate sellers out of the market. FYI: we use the same analytics in white-collar criminology to explain the circumstances under which "control fraud" can become endemic in a market. Best, Bill Black (UMKC)65.27.46.238 (talk) 06:51, 15 January 2012 (UTC)
I've removed a statement from the article claiming that "[s]ince that quantity of fiat currency is constantly increased through the fractional reserve banking system, modern money tends to constantly diminish in value." Unfortunately, the fractional reserve banking system doesn't "constantly increase" the quantity of currency over time. (According to the fractional reserve article, it simply increases the maximum amount of money in circulation by a constant factor.) --John Reed Riley (talk) 11:54, 2 March 2009 (UTC)
Mikołaj Kopernik (Nicolaus Copernicus) was carrying out the Polish monetary reform in the Polish Sejm (parliament) in 1526. It was him who personally invented the name for the new Polish currency - "złoty" ("złoty" is a Polish word and means "golden" in English). Kopernik also invented the economical law "Fałszywy Pieniądz Wypiera Prawdziwy z Obiegu" ("The Counterfeit Money is Driving Out the Authentic Money from the Circulation") and he personally presented it in the Polish Sejm in 1526.
He also published his work (written in Latin), titled "Monetae cudende ratio" - and his monetary law ("The Counterfeit Money is Driving Out the Authentic Money from the Circulation"), written in Latin, can be easilly found in this work by any interested historian.
Kopernik's work was published in 1526 (and he started working on it yet in 1519), in the same year he presented it in his speech in the Polish Sejm, as part of the Polish monetary reform (which was carried out in order to prevent the Polish currency and economy from German and Jewish counterfeit money).
Thomas Gresham was borned in 1519 - in 1526 he was still a child. Conclusion - this Law is not Gresham's invention - Copernicus was first!
I wonder why these facts are not included in this article yet? It seems that some "Western people" (and especially Anglo-Americans) are still so conceited if it comes to the history of other than their own parts of the world as according to common (common in the whole world except the Anglo-Amercian part of it) stereotypes.
But everyone can check on his own - just read the "Monetae cudende ratio". De facto the "Gresham's Law" was not invented by Gresham for the first time.
Best regards!,
Peter558 (talk) 22:27, 4 July 2009 (UTC)
Randy Cohen writes a blog at NYT, as well as sometimes columns. In this blog post, he talks about when anonymity should be disallowed in online forums, and has one line, "It is the conversational version of Gresham’s law: bad discourse drives out good."
It's nearly a throw-away line in a blog post. I can sympathize with the idea (although I actually think it's a misapplication of Gresham's law if Gresham's law is treated seriously rather than just as a slogan), but it's not notable, even if it is obvious. CRETOG8(t/c) 06:01, 30 August 2009 (UTC)
There's a bit on "real estate and other investments" in the applications section which isn't referenced, so I'm going to pull it out. CRETOG8(t/c) 15:28, 30 August 2009 (UTC)
I have removed the analogy to No Child Left Behind because I cannot see the relationship between students with a high and low potential for learning with a store of value having a difference between its face value and nominal value.
This is exemplified by the following deleted, uncited text:
Schools that respond to these incentives (and focus all their attention on those at the cusp of passing) in locations which allow easy switching of schools will tend to drive away the ignored students for whom the value of their education is not adequately captured by the Pass/Fail grade, as Gresham's Law predicts.
The only "relevant" citation, prefixed with "Gresham's Law poses a similar trap in education" does not actually make the case in which this article is arguing.
(Deleted from this version:) http://en.wikipedia.org/w/index.php?title=Gresham%27s_law&oldid=311114235 —Preceding unsigned comment added by Fulldecent (talk • contribs) 13:13, 2 September 2009 (UTC)
The Copernicus published in Latin his book on monetary reform early in 1526 under title: “Monetae Cudende Ratio” in which, for the first time in history, he stated the law of currency that “bad money derives the good money out of circulation.” At that time Thomas Gresham (1519-1579) was seven years old. Sources: http://www.pogonowski.com/?p=1099 —Preceding unsigned comment added by Mitchozog (talk • contribs) 14:05, 9 March 2010 (UTC)
I think the right quotation from Aristophanes' The Frogs is:
This city, it often seems to me
treats our best and worthiest citizens the way it does our old silver coins, our new gold ones, as well.* This money was never counterfeit—no, these coins appeared to be the finest coins of all, the only ones which bore the proper stamp. Everywhere among barbarians and Greeks they stood the test. But these we do not use. Instead we have our debased coins of bronze, 810 poorly struck some days ago or yesterday. —Preceding unsigned comment added by 190.138.174.252 (talk) 20:02, 8 January 2011 (UTC)
Currently, this article begins with Rothbard's definition of Gresham's Law, which focuses entirely on government compulsion. This seems overly narrow, and borderline POV. Gresham's law has historically been applied to a wide range of contexts that have nothing to do with state price-fixing: clipping, counterfeiting, physically inferior monies, etc. State intervention is a common theme in discussions of Gresham's Law, but the lede shouldn't be positioning it as the only possible situation. Ethan Mitchell (talk) 17:12, 16 January 2012 (UTC)
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I came across a nice precursor of Greshem's law in a quote from the Pali Canon in comparison to the Dhamma:
Just as, Kassapa, gold does not disappear so long as counterfeit gold has not arisen in the world, but when counterfeit gold arises then true gold disappears, so the true Dhamma does not disappear so long as a counterfeit of the true Dhamma has not arisen in the world, but when a counterfeit of the true Dhamma arises in the world, then the true Dhamma disappears.[1]
I think this is a noteworthy ancient formulation of the law and would be of quite a bit of interest to people looking for information on this subject. 2601:681:4D04:5CD0:52E5:49FF:FEC0:9662 (talk) 03:09, 9 April 2017 (UTC)
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@N2e: Re this edit, I don't see a contradiction here. The article doesn't say that Adam F did something in 1923; that would indeed be tricky for someone born in 1932. The text only says that he pointed out some fact about 1923. Presumably he did this in his 1975 book, though I don't have a copy and the article text here doesn't say. -- John of Reading (talk) 12:27, 16 April 2018 (UTC)
This article really needs a once-over by someone good at excising extra info and links. We don't need:
And this is just the first 1/3. I realize I could do this myself, but I don't know the subject enough (which is why I came to the page).Manys (talk) 00:23, 27 March 2019 (UTC)
This was all discussed in the 18th and early 19th c debate in the UK over paper money, eg, Thornton, Horner, et al. Secondly, legal tender laws do not necessarily require the acceptance of denominated money. — Preceding unsigned comment added by 108.28.145.174 (talk) 18:45, 21 February 2020 (UTC)
money 197.215.27.177 (talk) 17:43, 28 May 2022 (UTC)
In standard English, the proper noun Thiers is written as Thiers's if it is in the possessive case. This article writes it as Thiers' but I do not have access to the Berholz work in which the phrase was coined. Since I cannot check Berholz's construction, I am loath to change the spelling in this context. An editor who has access to the Berholz should check its text for the original spelling. —catsmoke talk 10:13, 26 May 2024 (UTC)