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tomandlu

Medieval Finance

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Don't know if anyone else has posted this short piece from Monday's Guardian, but it's not without interest:

With our political system tarnished by expenses fiddling, and the banking system in meltdown, there is one period that provides a blueprint for an enlightened financial system - the middle ages.

It may conjure up images of dirt, squalor and plague, but the middle ages also created a society that was, remarkably, anti-capitalist. First, the medievals banned usury, or charging interest on loans. This was based on the Bible saying it was a sin to take advantage of the misfortune of a brother Christian.

Second, the medievals insisted on the "just and fixed price" for goods. Although this was the market price, everyone agreed to stick by it. You were not permitted to undercut or to overcharge.

Third, work was organised around the guilds system. There were no limited companies owned by a small group of capitalists trading their shares on the stock exchange. The workers owned the means of production.

As GK Chesterton wrote in 1926: "The principle of medieval trade was admittedly comradeship and justice, while the principle of modern trade is avowedly competition and greed." We would do well to get a bit medieval today.

BTW it's worth going to the original article, if only to see some ancestors of Brown and Mandelson... ;)

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It made the rich richer and the poor very poor...

you talking about then or now?

as now the rich get richer, the poor get catered for, and everyone else has to fight to stay afloat!

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First, the medievals banned usury, or charging interest on loans

This always puzzles me. Together with the muslim stance on usury, doesn't inflation exist in these ideal worlds? Otherwise, why would anyone lend at a loss?

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Guest Parry
you talking about then or now?

as now the rich get richer, the poor get catered for, and everyone else has to fight to stay afloat!

Good post.

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From what I understand inflation was eradicated in the middle ages

here is a graph from 1760 of UK inflation:

inflation-since-1760.jpg

over the past 1000 years there have been long periods of deflation where it was impossible to borrow money, with the odd bubble. If you could borrow money the risks were large, so people couldn't move up the society. Debts would cascade and throw chains of people who did busines together all into prison just because of one person in the chain loosing money or running away. The rich owned the property and rented it out to the poor at a massive yeild, the poor couldnt borrow money and .'. couldn't buy even through rents were a large proportion of income. The rich lived off the income, the value of there money rose each year due to deflation, and assets are passed onto children. The rich got richer and richer and the poor turned into slaves.

IMHO Low inflation/deflation is bad because it stops people from taking risks and reduces social mobility.

Edited by moosetea

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Although this was the market price, everyone agreed to stick by it. You were not permitted to undercut or to overcharge.

lmao x10. the socialist guardian does not understand money wealth or economics.

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From what I understand inflation was eradicated in the middle ages

here is a graph from 1760

inflation-since-1760.jpg

over the past 1000 years there have been long periods of deflation where it was impossible to borrow money, with the odd bubble. The rich owned the property and rented it out to the poor at a massive yeild, the poor couldnt borrow money and .'. couldn't buy even through rents were a large proportion of income. The rich lived off the income, the value of there money rose each year due to deflation, and assets are passed onto children. The rich got richer and richer and the poor turned into slaves

And a couple of those decendants are David Cameron and George Osbourne and there are a lot of deluded fools on HPC whom will vote for these silver spoon merchants next year

God help us

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And a couple of those decendants are David Cameron and George Osbourne and there are a lot of deluded fools on HPC whom will vote for these silver spoon merchants next year

God help us

no their parents definitely paid market rates for their privileged education...

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This always puzzles me. Together with the muslim stance on usury, doesn't inflation exist in these ideal worlds? Otherwise, why would anyone lend at a loss?

Even if there were no inflation, you would still need to be paid to loan money

In these circumstances, either the people who loan are allowed to charge interest and call it something else or simply do not loan.

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Guest sillybear2

Hrm, what makes them think we ever left the middle ages 0.6% of the population still own 69% of all the land.

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Inflation, speculation and buying property, and booms and busts is good thing. However personally you have to time it right. Buying property and land allows the common man to level the playing field.. Banning Debt/Making is hard to take out loans/deflation creates a massive gap between the rich landed and the poor.

Edited by moosetea

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Guest sillybear2
Inflation, speculation and buying property, and booms and busts is good thing. However personally you have to time it right. Buying property and land allows the common man to level the playing field..

By stealing off his children? :rolleyes:

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By stealing off his children? :rolleyes:

Nahh its not stealing, are you poorer than a serf in the middle ages? Inflation means there will be more money for your children to buy stuff with and they will earn more than you could ever imagine, and you dont really own anything your just looking after things for the next generation.... If I could build a time machine I would back in time to 1960 get a big loan and buy a massive chunk of land (Half of dorset?)... and your future children would want to go back to today and do the same if only they could...

Edited by moosetea

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it's amazing how socialists, in all honesty, think medieval times were somehow richer than now owing to non-capitalism. The opposite point is tru - we are 1000s of times wealthier than they were - because we have capitalism.

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Guest DissipatedYouthIsValuable
And a couple of those decendants are David Cameron and George Osbourne and there are a lot of deluded fools on HPC whom will vote for these silver spoon merchants next year

God help us

IF wikipedia is anything to go buy, there have been a fair few bankers and estate agents in the Cameron line.

And something to do with Russo-Japanese War Bonds and those Rothschilds.

At the very least, a Conservative government can't claim they don't understand banking and monetary systems.

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Guest sillybear2
Nahh its not stealing, are you poorer than a serf in the middle ages? Inflation means there will be more money for your children to buy stuff with and they will earn more than you could ever imagine, and you dont really own anything your just looking after things for the next generation.... If I could build a time machine I would back in time to 1960 get a big loan and buy a massive chunk of land (Half of dorset?)... and your future children would want to go back to today and do the same if only they could...

Yes, so basically stealing off the next generation wholesale, that's precisely what the Inclosure Acts did.

Property speculation doesn't add value, it's a zero-sum game, your gain is somebody elses' loss... or future loss.

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Yes, so basically stealing off the next generation wholesale, that's precisely what the Inclosure Acts did.

Property speculation doesn't add value, it's a zero-sum game, your gain is somebody elses' loss... or future loss.

jeez - the inclosure acts allowed investment in the land - sure compensation would have been appropriate to the masses, but only a fool would suggest we weren't, in the long run. massively richer for it...

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Nahh its not stealing, are you poorer than a serf in the middle ages? Inflation means there will be more money for your children to buy stuff with and they will earn more than you could ever imagine, and you dont really own anything your just looking after things for the next generation.... If I could build a time machine I would back in time to 1960 get a big loan and buy a massive chunk of land (Half of dorset?)... and your future children would want to go back to today and do the same if only they could...

Think you are tying yourselves in knots here moosetea. You wouldn't be able to get a big loan in 1960. If you could, Dorset wouldn't be as cheap as everyone would be doing it. Heck, why not try and get a big enough loan and buy half of Dorset now. And inflation is largely irrelevant to banks anyway, as long as interest rates are above inflation the banks don't care. What you have to hope for is wage inflation to outpace price inflation for the long term, which is did post war. I'm not convinced our future is as rosey.

There is nothing wrong with ownership of land. What sucks is the political control of it. Tax it like Harrison suggests and you'll destroy the economic incentive for land banks and massive, underutilised country estates. Councils are also incentivised to develop more land.

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Guest sillybear2
jeez - the inclosure acts allowed investment in the land - sure compensation would have been appropriate to the masses, but only a fool would suggest we weren't, in the long run. massively richer for it...

We're massively poorer for it, and still are, why do you think we have a housing crisis, because of a physical lack of land?

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jeez - the inclosure acts allowed investment in the land - sure compensation would have been appropriate to the masses, but only a fool would suggest we weren't, in the long run. massively richer for it...

You are Lord Fauntleroy Cummings-Winstanley and I claim my £5.

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We're massively poorer for it, and still are, why do you think we have a housing crisis, because of a physical lack of land?

show me a causal connection between the inclosures acts between 12th and 19th centuries, and the 20/21st century urban planning system (!) and you may have a point.

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You are Lord Fauntleroy Cummings-Winstanley and I claim my £5.

indeed - cheque's in the (horse drawn) post delivered by my loyal manservant Smith

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As I see it, us, and our ancestors, have paid for this land many times over.

Who, in the end, is getting this money, and why aren't we all able to live on this land without having to pay tax, or interest, to have it?

(rhetorical question, btw).

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Guest sillybear2
show me a causal connection between the inclosures acts between 12th and 19th centuries, and the 20/21st century urban planning system (!) and you may have a point.

The fact 90% of the population are squeezed onto 8% of the land says a lot about both, and the landed gentry's in house lobby group, the CPRE, keep calling for ever increasing density targets so land owners and developers can milk every last acre for millions more by packing ever more people in an area.

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