Isaac Newton is certainly one of the most important scientists in human history—mathematician, physicist, astronomer, philosopher, and theologian. In the second half of his life, he discovered the world of economic sciences, focusing on monetary economics. His story is not very different from the one of Copernicus. Newton put himself at the service of his country, studying coinage, to successfully solve the economic crisis which was afflicting it. Moreover, the way in which his scientific research influenced later philosophy is also a traceable aspect of many economists of the classical tradition.

The Royal Mint’s Master’s Degree

In 1699, Isaac Newton, who had become famous throughout Great Britain for his scientific studies, was appointed Master of the Royal Mint. This role had always been purely symbolic, but it was not so for Newton, who took it very seriously (unlike the bureaucrats who had preceded him). The United Kingdom was, in fact, in a serious monetary crisis due to the very frequent counterfeiting suffered by the currency: fraudsters filed the edges of the coins and put coins of lower intrinsic value into circulation, causing disastrous inflation throughout England.

Newton himself was responsible for finding and punishing fraudsters and developed new techniques to limit the possibility of counterfeiting, such as the knurling on the edge of coins that is still used today. But most important of all was the mathematical precision with which the coins had to be minted: hammer minting was abolished and replaced with machine minting. The amount of metal contained in the coins had to be meticulous and standardized.

In Newton’s time, Britain was under a bimetallic regime where there were two types of coins: high-value gold coins and low-value silver coins. A gold coin was worth 20 silver shillings, but in 1717, Newton imposed the equation where one gold coin was equal to 21 silver coins. This was actually a miscalculation on the part of the scientist, who unwittingly triggered an interesting economic revolution for England and the whole world: people began to exchange gold coins for silver coins, putting more gold into circulation, while silver was exported. The price of gold remained stable while silver continued to fluctuate. This miscalculation favored gold and shifted the British currency to a standard based solely on gold, instead of both metals, thus giving rise to the gold standard.