Dr. Hyun Jae Yoo, Research Fellow of Kyujanggak Institute for Korean Studies at Seoul National University and visiting scholar in the James Joo-Jin Kim Program in Korean Studies, gave a lecture on Tuesday, January 31, 2017 as part of the Korean Studies Colloquium. He spoke about “Circulation of Coins in East Asia: 1650-1800.”
The first Kim Program lecture of the Spring 2017 semester, “Circulation of Coins in East Asia: 1650-1800,” was given by Hyun Jae Yoo, a research fellow of the Kyujanggak Institute for Korean Studies at Seoul National University and a visiting scholar in Penn’s Kim Program in Korean Studies. Introducing Yoo, Dr. Eugene Park, director of the Kim Program, explained that this talk was somewhat out of the ordinary for two reasons. The first was that it is relatively uncommon to hear a talk on the economic history of early modern Korea. Second was that it is also relatively rare to have a talk by a speaker from a non-Anglophone country comfortable enough speaking English to give such a lecture.
Yoo began his lecture by reviewing some of the history of currency. He explained that traditionally, barter systems were acceptable for conducting trade when there was a “double coincidence of wants.” But when this is lacking, it is necessary to have some sort of medium of exchange. This, according to Yoo, is the commonly-held theory for explaining the origin of coins. He then noted how some forms of currency have intrinsic value (for example, the material value of the metal in a coin) while other forms have designated value, which is usually indicated on the currency and must be backed up by a government or other entity for that value to have meaning. Early forms of metallic money in East Asia were not necessarily coins and came in various shapes, including what is known as “knife money” in Korea, roughly dagger-shaped pieces of bronze.
The design and composition of coins was also a topic of Yoo’s lecture. Coins in East Asia in this period were composed primarily of copper (60-70%) in an alloy with zinc (20-30%) and contained a negligible amount of lead. The process began with refinement of copper ore and then the melting of the copper before molding it into shape. The government of Chosŏn (1392-1910) Korea produced two types of coins this way. Round coins were intended for domestic use while ingots were used for foreign trade. Korean coins at this time were stamped with characters which read “ever-normal circulating treasure,” signifying the status of the coins as legal tender for circulation regardless of date (unlike contemporary Chinese coins, which were stamped with the name of the imperial era in which they were minted).
But the primary objective of Yoo’s talk was answering the following question: “Why did East Asian countries mint coins despite such high costs of production?” (Yoo’s emphasis). According to Yoo, the value of a coin was not very high when factoring in the refining procedure, which was difficult and time-consuming for the government. The most expensive part of making coins, though, was the metal itself. Yoo said that the cost of raw materials made up 69% of the production cost of coins. Despite, or perhaps because of, the cost, coins were relatively uncommon in Chosŏn Korea. In the late 17th and early 19th centuries, there was, according to Yoo, a scarcity of metal coinage in Korea. Coins were thus not used in the majority of private transactions in when barter would suffice.
Why then, did Chosŏn Korea produce the coins? Yoo argues the most important usage of coinage in East Asia, particularly in Korea, was fiscal policy, to regulate prices in the economy or to issue currency to commoners and relieve economic hardship. Specifically, he explained that the exchange rate for silver to coins (that is, the amount of silver the government would pay out for coins) was significantly lower than that of either China or Japan. This allowed the government to make a profit off coinage, a practice known as seignorage. Thus, the state’s motivation for minting coins was not to so much to provide a medium of exchange for everyday economics, but so the that the government could influence trade and the economy.