Securing the Commonwealth: Debt, Speculation, and Writing in the Making of Early America (review)

Jennifer J. Baker’s Securing the Commonwealth explores the imagined community of finance in Anglo-America, showing how new ways of conceiving commerce, currency, and wealth shaped social and political self-understanding. Her story spans roughly from the 1690s through the 1790s and explores the history of writing in promoting credit, public debt, paper currency, markets, and economic projects. She uses a series of key texts—Cotton Mather’s famous life of Gov. William Phipps, Ebenezer Cooke’s satires of the Maryland tobacco culture, Benjamin Franklin’s writings on wealth and public credit, Royal Tyler’s play “The Contrast,” Charles Brockden Brown’s novel Arthur Mervyn, and Judith Sargent Murray’s plays and essays—as occasions for exploring the changing dynamic of risk, public faith in media of exchange, and contractual relations.

Part of the story advanced in Securing the Commonwealth should be familiar to persons versed in early American economic history—the duplicity of governments increasingly comfortable with floating large public debt while paying lip service to notions of fiscal conservatism—the difficulties of employing coin—hard specie—in a colonial economy, and the almost necessary resort to paper. Baker’s novelty lies in her demonstration of how ideas about the proper means of keeping economic activity robust and public faith in credit strong pervaded literature. Parts of the argument have a sensible cogency—for instance, how credit in one’s promissory paper, in one’s business, and one’s goods intimately intermixed with one’s reputation, so the management of self-representations stood at the center of an individual’s and even a community’s economic activity. Her attention to the role of print culture in imagining and performing exchange is particularly convincing. Writing and publication contributed to the velocity and expansion of exchange by broadcasting reputations, advertising needs and desires, and broaching possible fruitions and outcomes of economic action. Baker highlights what might be called the anodyne character of publication—the way it assured publics of the soundness of economic activity, by repeatedly voicing anxiety about debt, by haranguing about the need for reliable circulating media, by counseling sumptuary prudence, by critiquing fanciful projects. If a readership believed that the press and the literate class were attentive watchdogs, barking an alarm at any untoward intrusions into the market and irregularity in the media, they felt more secure in engaging in the exchanges that generated a common prosperity. Baker makes the additional point that, given the perpetual problem of lacking sufficient hard specie (gold or silver) in Anglo-America to generate economic expansion, the recourse to paper money and paper credit required a visible regularity in production of legal tender. The printing press supplied this doubly: by mass production of identical notes and by vigilant journalists fretting over the health of the currency.

Perhaps the greatest danger posed by the new economic imagination of the seventeenth and eighteenth centuries was debt. The Dutch had conceptually refashioned debt from a liability—something like sin that had to be redeemed or else subject the debtor to punishment—to a positive token of faith; in Dutch eyes the public debt was good because it bespoke a faith in the nation’s futurity. In the new economic thinking, personal debt was the other side of one’s credit; its extent testified to the social credence in one’s long-term ability to not simply repay, but profit from one’s enterprises. The problem, of course, was that vanity and accident made persons undertake obligations that exceeded an ability to pay, bringing ruin. When obligations by design entailed risk they were termed speculations.

The dangers of business, particularly speculative ventures, gave rise to new techniques for mitigating the likelihood of ruin: the sharing of debt and profit in limited partnerships (a legal and social remedy), the calculation of risk (an actuarial remedy enabled by mathematical innovations in the field of probability), the provision for...