Post
Topic
Board Economics
Re: Were the Keynesians wrong?
by
twiifm
on 19/01/2015, 07:53:45 UTC


Because this historical vision is the standard vision in economy.  So even if you put von Mises and Hayek on doubt, even Keynes, who is all in for state control and state money and so on, acknowledges this vision, it is a proof that this is not the product of an "emotional mind".  It is standard economic theory. 



What vision is that? 

Its known that credit money systems existed first, then coinage began roughly between 500-600 BC.  Before that all the precious metals were collected in temples and only held by the rich and royalty.  Its not known why they stared to produce coins.  Prior to this the gold was only used for international trade in the form of ingots.

But it happened during the Axial Age so an explanation is that when the "Great Civilizations" sent their armies out to conquer and loot new territories they gave coins to their soldiers to they can buy food on their campaigns.  Then they loot and plunder and bring home slaves and precious metals to the king so he can mint the into coins and pay for more soldiers.

So


Quote

https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years

Graeber lays out the historical development of the idea of debt starting from the first recorded debt systems, in the Sumer civilization around 3500 BC. In this early form of borrowing and lending, farmers would often become so mired in debt that their children would be forced into debt peonage. Kings periodically canceled all debts. In ancient Israel, the resulting amnesty came to be known as the Law of Jubilee.

The author claims that debt and credit historically appeared before money, which itself appeared before barter. This is the opposite of the narrative given in standard economics texts dating back to Adam Smith. To support this, he cites numerous historical, ethnographic and archaeological studies. He also claims that the standard economics texts cite no evidence for suggesting that money came before barter, credit and debt, and he has seen no credible reports suggesting such.

The primary theme of the book is that excessive popular indebtedness has sometimes led to unrest, insurrection, and revolt.

He argues that credit systems originally developed as means of account long before the advent of coinage, which appeared around 600 BC. Credit can still be seen operating in non-monetary economies. Barter, on the other hand, seems primarily to have been used for limited exchanges between different societies that had infrequent contact and often were in a context of ritualized warfare.

Graeber suggests that economic life originally related to social currencies. These were closely related to routine non-market interactions within a community. This created an "everyday communism" based on mutual expectations and responsibilities among individuals. This type of economy is contrasted with exchange based on formal equality and reciprocity (but not necessarily leading to market relations) and hierarchy. The hierarchies in turn tended to institutionalize inequalities in customs and castes.

The great Axial Age civilizations (800–200 BC) began to use coins to quantify the economic values of portions of what Graeber calls "human economies". Graeber says these civilizations held a radically different conception of debt and social relations. These were based on the radical incalculability of human life and the constant creation and recreation of social bonds through gifts, marriages, and general sociability. The author postulates the growth of a "military–coinage–slave complex" around this time. These were enforced by mercenary armies that looted cities and cut human beings from their social context to work as slaves in Greece, Rome, and elsewhere. The extreme violence of the period marked by the rise of great empires in China, India, and the Mediterranean was, in this way, connected with the advent of large-scale slavery and the use of coins to pay soldiers. This was combined with obligations to pay taxes in currency: The obligation to pay taxes with money required people to engage in monetary transactions, often with very disadvantageous terms of trade. This typically increased debt and slavery.

At this time, great religions also spread, and the general questions of philosophical inquiry emerged on world history. These included discussions of debt and its relation to ethics (e.g., Plato's Republic).

When the great empires in Rome and India collapsed, the resulting checkerboard of small kingdoms and republics saw the gradual decline in standing armies and cities. This included the creation of hierarchical caste systems, the retreat of gold and silver to the temples and the abolition of slavery. Although hard currency was no longer used in everyday life, its use as a unit of account and credit continued in medieval Europe. Graeber insists that people in the Middle Ages in Europe continued to use the concept of money, even thought they no longer had the physical symbols. This contradicts the popular claims of economists that the Middle Ages saw the economy "revert to barter". During the Middle Ages more sophisticated financial instruments appeared. These included promissory notes and paper money (in China, where the empire managed to survive the collapse observed elsewhere), letters of credit, and cheques (in the Islamic world).[2]