19th Century Populist and Monetary Dove Ignatius Donnelly

In a loose sense, I have thought of the Tea Party as populists. But in reading H. W. Brands’ history American Colossus: The Triumph of Capitalism, 1865-1900, I learned that in 19th Century U.S. history it was the members of the People’s Party who were called “Populists.” The 19th Century Populists saw low interest rates as good for the interests of common people, who were more likely to be debtors, and high interest rates as good for the big banks, who represented creditors. As a result, they were what we would now call monetary policy doves.  

Ignatius Donnelly was a very interesting character. Before being nominated for vice president in 1900 on the People’s Party ticket, he had invented many controversial historical theories, particularly about Atlantis, Catastrophism, and Sir Francis Bacon as the author of what we know as the works of Shakespeare. The title of his Catastrophist work Ragnarok: The Age of Fire and Gravel(in which he argues that the Biblical Flood, and consequent destruction of Atlantis, was the result of the near collision of the Earth with a comet) reminds me of the title of my science fiction story “Ragnarok” that I posted back in September. 

Ignatius’s monetary theory was more on target than his history. H. W. Brands (p. 442-443) quotes from Ignatius’s dystopian novel Caesar’s Column, where Ignatius took a dig at the deflationary policies of the Benjamin Harrison administration:

Take a child a few years old; let a blacksmith weld around his waist an iron band. At first it causes him little inconvenience. He plays. As he grows older it becomes tighter; it causes him pain; he scarcely knows what ails him. He still grows. All his internal organs are cramped and displaced. He grows still larger; he has the head, shoulders and limbs of a man and the waist of a child. He is a monstrosity. He dies. This is a picture of the world of to-day, bound in the silly superstition of some prehistoric nation. But this is not all. Every decrease in the quantity, actual or relative, of gold and silver increases the purchasing power of the dollars made out of them; and the dollar becomes the equivalent for a larger amount of the labor of man and his production. This makes the rich man richer and the poor man poorer. The iron band is displacing the organs of life. As the dollar rises in value, man sinks. Hence the decrease in wages; the increase in the power of wealth; the luxury of the few; the misery of the many.