IN MY view, the finest economics pamphlet ever written by a Scotsman is Sir Walter Scott's Letters of Malachi Malagrowther. He was attacking Robert Peel's Banking Act. It is barely possible to reconstitute the mental landscape which was familiar to Scott and his contemporaries. It involves the blasphemy - we do not need a central bank. I am sorry to offend the main tabernacle of socialism.
It is now nearly a universal assumption that the state must be a monopoly supplier of currency within its boundaries. The European Union wanted to achieve this with the euro. Britain opted out - to our great good fortune in my view. Yet we are still subject to the government's monopoly money.
I submit Walter Scott was correct to doubt the wisdom of compressing so much power in one institution.
Scottish pride can be mollified by the insight that William Paterson of Peebles conceived and devised the Bank of England. It was to be a money raising device for the Crown. So it remains.
It was not intended to suppress other banks but those who opposed it because they rightly feared it would inflate the currency (such as Richard Hoare fou