A Land Economy

[brainclamp]

I have been reading about the events before the french revolution.

John Law, a scottish adventurer, wrote a treatese about money - why it should be created according to trade - basically the precursor to modern credit money system we use today.

He was a wily gambler who scooted over and became the central banker of France (established in 1716).

It didn't take too long before a large amount of the new credit money was floating about thanks to varoius poltical demands. The economy revived and boomed.

In 1717 he created the Missassippi trading company with monopoly trade with a large slice of the US. As it won more and more trade monopolies and domestic public-private government contracts it's share price rose from 500l to 10000l in 1719. (190%).

It issued more and more shares as its trade grew paid via the new credit money, from savings either directly, or through using other peoples savings - a bank loan. The money supply rose greatly in 1718.

Many millionares were created overnight.

Silver shot up in value in relation to the notes, in 1718, but there was no real inflation in goods noticed till late 1719 - by Jan 1720 - one month it rose by double digits at 23%, and was at a annual rate of 19% for the rest of the year of 1720.

In Jan 1720 the stock price began to fall. The price of shares dropped to 2000l as they devalued.

http://www.heraldica.org/econ/law.pdf

The french population was growing at a breakneck speed throughout 1720, from 20m in 1700 to 26m ending in 1800 at 30m. http://chnm.gmu.edu/revolution/chap1a.html

However, after the events what became of the economy?

The economy became very much a land economy where the ownership of land title created a vast gulf between the haves and have-nots, who could never afford land, and had to scabble for a living in between centrally imposed taxes.

There was no real social mobility, your class belonged to one of three estates - nobility, clergy, or the 'third estate' - the masses of peasents kept in thier place with a hand to mouth existance.

There was no houseprice crash. A stagnate land economy with regulated surfs was left after the collapse. Surfs belonged to the landlord and the state.

Edited March 31, 2006 by brainclamp

[non-FTBer]

Surfs up?

[brainclamp]

What do you think will occur if there is no houseprice crash....

You can see the vast gulf between the haves and the have-nots. If there is a increase in the money supply, regardless of it not occuring in the inflation figures, it makes people poorer if there wages do not increase correspondingly, and moves us futher towards a land economy.

I do not think the infrastructure being laid down - peoples details on a population database, histories of transactions and movements to be used by minor officialdom at ther whim, huge forms to be filled in every time you move is for peoples benefit.

Edited March 31, 2006 by brainclamp

[oracle]

What do you think will occur if there is no houseprice crash....

You can see the vast gulf between the haves and the have-nots. If there is a increase in the money supply, regardless of it not occuring in the inflation figures, it makes people poorer if there wages do not increase correspondingly, and moves us futher towards a land economy.

I do not think the infrastructure being laid down - peoples details on a population database, histories of transactions and movements to be used by minor officialdom at ther whim, huge forms to be filled in every time you move is for peoples benefit.

what the land-grab BTL fails to grasp is that they too are mostly living on hand-to-mouth earnings.This will become abundantly clear when the banks deliberately hike their rates and many head into reposession.

...banks don't lose out,they can recoup the money over many years,the small fry always get the thin end of the wedge.