922 FINANCIAL REFORM AND THE ECONOMY
involved in administering the use of currency and cash. Instead of bragging about
the superiority of native institutions, as most modern chauvinists are prone to
do, Yu measured Korea against cosmopolitan standards of perfection that tran-
scended national identity within the world of East Asian cultural awareness.^67
He learned from classical Chinese texts that currency was important as a
medium of exchange rather than as a source of wealth or as a means of increas-
ing nonagricultural production. He learned that a money economy might threaten
instability by over-or undersupply of either money itself, or the commodities for
sale on the market, and he advised that the government had the responsibility to
provide for cash, either through minting or importing, and to stabilize the value
of money by regulating its supply. It also had to prevent any actions that would
decrease the value of money or weaken public confidence in it as legal tender,
whether by private minting, counterfeiting, debasement, or excessive minting,
or conversely increasing money's value by melting it down or exporting it abroad.
This type of conservative approach to the money supply by no means indi-
cated by itselfany hostility to commerce, since advocates of sound or hard money
who prefen'ed silver coins or specie payments instead of paper money or bank
notes unbacked by things of value was also part of the program of Andrew Jack-
son and the radical Democrats in the United States in the 1830s. They did bat-
tle with the American system of Alexander Hamilton and the Federalists, who
were devoted to high-tariff protectionism, the monopoly of the state-supported
private U.S. Bank and its issuance of bank notes and paper money, and state
support for the economy.68 It shares the approach of twentieth-century hard money
advocates of the gold standard for currency or maintenance of the stability of
the currency against the potential effects of inflation and the desire of govern-
ments to print money and expand the money supply to meet budget deficits.
The circumstances in mid-seventeenth century Korea. however, were some-
what different. Gold and silver did not circulate, and silver was only used as a
standard for sctting the value of grain, cloth, and copper cash. The absence of
an adequate currency meant that the circulation of goods was obstructed, and
now that the taedol1g taxation system had been adopted. a more rapid circula-
tion of goods was necessary for the market purchases of necessities by the state
to work efficiently.
Yu's predilection for his concept of hard money - penny cash close to the
intrinsic value of the copper in it - was coupled with his belief in the positive
role of the state. With reformist officials of his generation he believed that the
statc had a necessary role to play in stimulating the spread of cash throughout
the economy. instead of leaving the fate of cash to any free-market philosophy
untrammeled by government interference. He presumed that the main means
of providing for the flow of cash was converting taxes and government pay-
ments to cash, rather than by stimulating expanding production. liberating mer-
chants from government constraint, or encouraging peasants to go into
commercial or industrial activity or foreign trade, even though he advocated
establishing shops to accept cash from consumers. He believed that with proper