920 FINANCIAL REFORM AND THE ECONOMYfailed to circulate, presumably because it was still overvalued, the price of one
mal was raised to fifty and later seventy mun of cash. Even though the govern-
ment used cash for salaries, it only used cash to pay for extra grants instead of
the basic salaries of officials. The hope that the people would adopt cash for use
in private transactions was doomed to failure, and when the circulation of the
cash ceased, the government had no choice but to abolish it as legal tender.^63
Yu presupposed that an ideal cash economy would consist only of a single
coin similar to a U.S. penny, and that its value could be set at 200 mun or coins
per yang of silver and 20 mun per mal of rice. Although large transactions would
require transporting cartloads of strings of a thousand coins each, he assumed
that a cash economy would not be subjected to disruptive volatility in price fluc-
tuations because the king would maintain control over the money supply, set
the face value of the single coin based on an equivalent to the cost of the metal-
lic content and labor, and fix prices of other commodities in cash. These prices
would be maintained in perpetuity by state regulation of the money supply, not
only in preventing commodity price inflation by checking excessive minting of
cash, but also by stopping commodity price deflation and an increase in the value
of cash by guaranteeing a sufficient supply of copper to meet the increased
demand for cash as its circulation spread throughout the country by importing
foreign copper. As we will see, after 1678 Korean money managers had to deal
with both problems, and Yu's overall proposal for the creation of stable prices
in a money economy appeared to be more logical than the remedies adopted by
Sukchong and subsequent kings.
Progressive ConservatismYu's advocacy of cash when Korea was advancing beyond the stage of cloth and
grain as media of exchange appears to have been progressive, but his funda-
mental attitudes toward cash were rooted not only in classical thought, but also
in the classical model of ancient society and economy by which the market served
only to move goods from areas of surplus and concentration to those of short-
age and deprivation, and money only played the role of lubricating the flow of
goods.^64 Despite his willingness to import as much copper as needed to expand
the supply of currency throughout the nation, he had no concept of stimulating
production and expanding market activities to escape the constraints of a fun-
damentally agrarian economy, or using cash as a means of accumulating capi-
tal for large-scale commercial, let alone industrial, projects.^65 Had he believed
in the virtues of large-scale capital formation to fuel commercial or industrial
expansion, hc would have been aware of the bottleneck created by having no
medium of exchange other than pennies.
He also provided another excellent indication of the conservative nature of
his vision for the economy in his appendum to his essay on cash, a short trea-
tise advocating that the state abolish what he called "empty markets" (kongjang)
or "empty markets in outer [i.e., suburban] areas" (oech ,/i kongjang). Judging