John Fullarton

Born 1780; died Oct. 24, 1849. British economist and banker.

Fullarton wrote, for the most part, on questions of credit and monetary circulation, as seen in his principal work, On the Regulation of Currencies (1844). K. Marx regarded Fullarton as among the best of the bourgeois economists. Fullarton rejected the quantity theory of money and legislative limitations on the issuance of bank notes. He noted that the error of the theory is rooted in the confusion of the concepts of paper and credit money, that is, between money as a means of circulation and money as a means of payment. Although the amount of paper money issued by the state and mandatory for receipt is not regulated by the needs of circulation, Fullarton pointed out, the amount of credit money is regulated by public demand; bank notes that exceed the needs of circulation are returned to the banks that issued them.

At the same time, Fullarton could not work out a genuinely scientific concept of the laws of monetary circulation, since he did not thoroughly demonstrate the true nature of money. He also did not understand the difference between the nature of money and the nature of capital. He erroneously reduced the concept of capital to banking capital in the narrow sense of the word, and he therefore confused the demand for money as a means of payment with the demand for capital in this sense.