Jehan Cherruyt, Sieur de Malestroict, ?-?

16th Century monetary writer.

Little is known of the Sieur de Malestroit (archaically spelled Malestroict), save that he was a French master of royal accounts and the author of a series of Paradoxes (written 1566) that were disputed by Jean Bodin  (the personal name "Jehan Cherruyt" is not given on the tract, but is assigned by later historians, drawing on other French records).

The Paradoxes were written, in typically Scholastic form, to invite open debate on the question of the great price inflation which had arisen in the mid-16th Century in many European countries.   The inflation debate was already going on in the Salamanca School in Spain, but Malestroit opened here the debate in France.  He posited two paradoxes: (1) there is no inflation and has been no inflation for the past 300 years; (2) "that a significant loss can be made on an ecu (or other gold or silver coin) even though it is paid out at the same price at which it was received"

Malestroit posited that the value of goods was directly related to gold and silver content of coinage.  He goes on to explained that the great inflation could be ascribed purely to the debasement of the currency - not debasement of actual coins by the king (Malestroit's boss), but by the rising moneys of account used by private contracts.  That when this deterioration of the unit of account were adjusted for metal content, there was, in fact, no inflation at all.  

To use Malestroit's example, a century earlier, the price of a yard of velvet cloth used to cost 4 livres, and now it cost  10 livres. It seems evident inflation has happened. But the "livre" is a unit of accounting money, used in ledgers, not actual metal money.  If you consider instead an ecu (a metal coin), the story is different.  An ecu coin is currently worth 2.5 livres (or 50 sols) in accounting money, but a century ago that same ecu coin was worth 1 livre (or 20 sols) in accounting money.  So the current value of velvet (10 livres) is equivalent four ecus coins - which is exactly the same as it cost (in ecu coins) a century earlier.  Ergo, the real price of velvet, in terms of precious metal money, has not risen, so there is no inflation.  The inflation is a fiction caused by the depreciation of the livre, the unit of accounting money. ("Et ainsi l'encherissement que l'on cuide de estre maintenant sur toutes choses, ce n'est qu'une opinion vaine, ou image de compte sans effet ny substance quelconque." pp pp.)

The second paradox is not much of a paradox - it merely refers to holders of debt instruments (like bonds/rentes), where the security specifies repayment in livres (accounting money)  The depreciation of the accounting money relative to gold coin, means that you receive now less in gold than you originally lent out.

Malestroict's first argument was disputed by Jean Bodin.  Bodin not only casts doubt on Malestroit's empirical facts (did velvet even exist in France back then?), constructs his own price series (yes, Jehan, there has been inflation, even in gold coins), but more famously,  goes on to formulate the quantity theory of money as a general explanation of inflation. Bodin's reply was attached to a 1568 reprint of the Paradoxes. Both Malestroit and Bodin were replied to by Gerard de Malynes.

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