Economics

"So why does the United Nations consider the US as a developed economy when its own statistics so clearly suggest otherwise? One might argue that it’s about simple wealth, or gross domestic product (GDP), the broadest measure of the economy, per capita. But if that were the measure of development then European countries such as Romania, Hungary and Slovakia should not qualify for the term “developed economy” while Bermuda, Qatar, Singapore and China should all make the list. Besides, GDP per capita is no reliable measure of wellbeing in a country like the US where the richest 5% of people own two-thirds of the national wealth. The facts are as exhaustive as they are exhausting. There’s one simple conclusion from all of this. We’ve been tricked. We’ve been told that America, like most other majority-white countries, deserves the title “developed economy”. It does not. You cannot charge a woman $39.95 to hold the baby that she has just given birth to. You cannot constantly operate hospitals at close to capacity in order to maximize profits. The pursuit of in systems built for public good has not worked ethically or practically."

"When Susan Finley developed flu-like symptoms, she didn’t go to the doctor because she was frightened about the cost. Finley’s grandparents later found her dead in her apartment. She was 53. Finley did not die as a result of Covid-19. She died in 2016 as a result of America’s healthcare system – a system that led her to avoid treatment for the common flu in order to avoid debt. It is that same system that is currently creaking under the pressure of a pandemic that experts warned was coming but governments failed to prepare for. It is a system that does not qualify for the term “developed”. The United States of America, we are told by everyone from the president to the United Nations, is a . That term, “developed economy”, sounds like an endpoint, like the man standing upright after a series of hunched and hairy iterations. It’s the contrast that makes the definition – developed economies can only really exist if they are compared to their poorer “developing” counterparts. Covid-19 has merely shown the cracks in a very successful marketing campaign about which category the US falls into."

"Most of the people who write about underdevelopment and who are read in the continents of Africa, Asia, and Latin America are spokesmen for the capitalist or bourgeois world. They seek to justify capitalist exploitation both inside and outside their own countries. One of the things which they do to confuse the issue is to place all underdeveloped countries in one camp and all developed countries in another camp irrespective of different social systems; so that the terms capitalist and socialist never enter the discussion. Instead, one is faced with a simple division between the industrialized nations and those that are not industrialized. It is true that both the United States and the Soviet Union are industrialized and it is true that when one looks at the statistics, countries such as France, Norway, Czechoslovakia, and Rumania are much closer together than any one of them is to an African country. But it is absolutely necessary to determine whether the standard of living in a given industrialized country is a product of its own internal resources or whether it stems from exploiting other countries. The United States has a small proportion of the world’s population and exploitable natural wealth but it enjoys a huge percentage of the wealth which comes from exploiting the labor and natural resources of the whole world."

"Development and underdevelopment are not only comparative terms, but that they also have a dialectical relationship one to the other: that is to say, the two help produce each other by interaction. Western Europe and Africa had a relationship which insured the transfer of wealth from Africa to Europe. The transfer was possible only after trade became truly international; and that takes one back to the late fifteenth century when Africa and Europe were drawn into common relations for the first time—along with Asia and the Americas. The developed and underdeveloped parts of the present capitalist section of the world have been in continuous contact for four and a half centuries. The contention here is that over that period Africa helped to develop Western Europe in the same proportion as Western Europe helped to underdevelop Africa."

"Why does it matter whether a country is defined as developing or not? Because it means that policymakers here can distract voters into thinking that crises are constantly diplomatic, military or trade based when actually the problems that America needs to fix most urgently are right here – they’re the crises of health and education. Had those problems been better addressed, the nation would not be struggling as desperately as it is right now."

"There are 2.9 hospital beds for every 1,000 people in the United States. That’s fewer than Turkmenistan (7.4 beds per 1,000), Mongolia (7.0), Argentina (5.0) and Libya (3.7). In fact, the US ranks 69th out of 182 countries analyzed by the World Health Organization. This lack of hospital beds is forcing doctors across the country to ration care under Covid-19, pushing up the number of preventable deaths. America’s numbers are similarly unimpressive when it comes to medical doctors. The United States has 2.6 doctors per 1,000 people, placing it behind Trinidad & Tobago (2.7), and Russia (4.0 doctors per 1,000, for a country that is described as being “in transition”). Life expectancies at birth are lower in the US than they are in Chile or China. The US has a higher maternal mortality rate than Iran or Saudi Arabia. It’s not just health. Access to the internet is better in Bahrain and Brunei (two countries the UN does not consider developed economies) than it is in the US. Inequality scores are higher in America than they are in Mali and Yemen. A closer country to America in inequality is Israel, a country which functions as an apartheid state. And the US ranks 81st in the world in terms of women’s political representation. So, you’ve got a better chance of making it into office as a woman if you live in Vietnam, or Albania. Sub-Saharan Africa is most comparable to America – 24% of seats in the region’s parliaments are held by women, the same figure as in the US. In the United States, 83% of students graduate high school. That figure is higher in Belarus, Ukraine, Kazakhstan, Barbados, Armenia, Bosnia & Herzegovina and Montenegro. None of those countries are considered “developed economies” by the United Nations."

"The banks have said, leave us deregulated, we know how to run things, don't put government in to meddle. Then with that freedom of maneuver they took huge gambles, and even made illegal actions, and then broke the world system. As soon as that happened then they rushed out to say 'bail us out, bail us out, if you don't bail us out, we're too big to fail, you have to save us'. As soon as that happened, they said 'oh, don't regulate us, we know what to do'. And they almost went back to their old story, and the public is standing there, amazed, because we just bailed you out how can you be paying yourself billions of dollars of bonuses again? And the bankers say, 'well we deserve it, what's your problem'? And the problem that the Occupy Wall Street and other protesters have is: you don't deserve it, you nearly broke the system, you gamed the economy, you're paying mega fines, yet you're still in the White House you're going to the state dinners, you're paying yourself huge bonuses, what kind of system is this?"

"When I talk about this in the United States, I'm often attacked, 'oh, you don't believe in the free market economy', I say, how much free market can there be? You say deregulate, the moment the banks get in trouble, you say bail them out, the moment you bail them out, you say go back to deregulation. That's not a free market, that's a game, and we have to get out of the game. We have to get back to grown-up behaviour. ... There is a lot of greed and there's very little accountability... One wonders in the United States sometime whether the government is regulating the banks, or are the banks determining government policy?... Why have the politicians protected them all along? You know why? Very simple. They pay for the politicians."

"As the Institute for Policy Studies pointed out on Oct. 1, "A real 'bailout' would target the troubled households of working American families. A $200 billion ‘Main Street Stimulus Package' could bolster the real economy and those left vulnerable by the subprime mortgage meltdown." Components of such a stimulus package could include "a $130 billion annual investment in renewable energy to stimulate good jobs anchored in local economies and reduce our dependency on oil" — and "a $50 billion outlay to help keep people in foreclosed homes through refinancing and creating new homeownership and housing opportunities” — and "a $20 billion aid package to states to address the squeeze on state and local government services that declining tax revenues are now forcing." But that kind of discourse for grassroots economic stimulus hasn’t gotten into the media storyline..."

"It’s mid-October, and the Wall Street bailout that was supposed to save the economy from collapse is a flop... Senate passage came on Thursday, Oct. 2...President Bush signed the $700 billion Wall Street bailout into law... Despite all the media hype about how the bailout measure would quickly steady the stock market, it fell and kept falling. Over the next week, ending Oct. 10, the Dow made history as stocks plunged by 18 percent in five trading days. And what about the ostensible main reason for the humongous bailout in the first place — unfreezing the credit markets? Well, in spite of the enormous media outcry for the bailout to get credit flowing, it didn’t. And the key economic factor in the recession — housing — remained just as stuck as before."

"So let me get this straight: Extending additional unemployment benefits to out-of-work Americans during a pandemic will make them lazy and lead to socialism, but trillions in bailouts to Wall St. bankers and corporate execs is good for the economy?"

"Bail out the people, not the corporations. Bail out the living world, not its destroyers. Let’s not waste our second chance."

"Last October, Congress passed the , putting $700 billion into the hands of the Treasury Department to bail out the nation’s banks at a moment of vanishing credit and peak financial panic. Over the next three months, Treasury poured nearly $239 billion into 296 of the nation’s 8,000 banks. The money went to big banks. It went to small banks. It went to banks that desperately wanted the money. It went to banks that didn’t want the money at all but had been ordered by Treasury to take it anyway. It went to banks that were quite happy to accept the windfall, and used the money simply to buy other banks. Some banks received as much as $45 billion, others as little as $1.5 million. Sixty-seven percent went to eight institutions; 33 percent went to the rest. And that was just the money that went to banks. Tens of billions more went to other companies... But once the money left the building, the government lost all track of it. The Treasury Department knew where it had sent the money, but nothing about what was done with it. Did the money aid the recovery? Was it spent for the purposes Congress intended? Did it save banks from collapse? Paulson’s Treasury Department had no idea, and didn’t seem to care. It never required the banks to explain what they did with this unprecedented infusion of capital."

"One of the most prevalent ideological mantras of Western capitalism is that the market should rule. But as the latest health and economic crises demonstrate, capitalists soon forget their worship of the market when times get tough. They scream for government money, and plenty of it. It turns out that “the market” is fine when it comes to whipping workers to accept lower wages, but when it comes to lower profits, the market can go hang. [...] Faced with the collapse of the capitalist economy, for the second time in a dozen years, with massive bankruptcies on the table and the stock market plunging by more than 30 percent and more to come, fervent advocates of the free market are now embracing government intervention to save their skins. [...] Governments around the world are now laying out money on things that just weeks ago they would have attacked as unaffordable. [...] It’s not that governments have suddenly discovered a big pot of gold in the basement of the . They say that they are taking these measures to both protect and to save the economy. But it’s obvious which takes priority. The new measures constitute the largest bailout bonanza in world history, carried out through state-administered transfers of public wealth and current and future debt to billionaires and : socialisation of losses, privatisation of profits. The outcome will be to further transfer, consolidate and concentrate wealth, just as has occurred since the GFC. While there is discussion about small handouts, nothing serious is being proposed to halt the mass layoffs now gathering steam."

"The rescue plan is better than nothing. It offers limited relief to some of those who desperately need it, and contains an ample fund to help the truly vulnerable: the piteous corporations flocking to the nanny state, hat in hand, hiding their copies of Ayn Rand and pleading once again for rescue by the public after having spent the glory years amassing vast profits and magnifying them with an orgy of stock buybacks. But no need to worry. The slush fund will be monitored by Trump and his Treasury Secretary, who can be trusted to be fair and just. And if they decide to disregard the demands of the new inspector-general and Congress, who is going to do anything about it? Barr’s Justice Department? Impeachment?"

"At the very least, the regular practice of public bailout out of the corporate sector should require stiff enforcement of a ban on stock buybacks, meaningful worker participation in management, an end to the scandalous protectionist measures of the mislabeled "free trade agreements" that guarantee huge profits for Big Pharma while raising drug prices far beyond what they would be under rational arrangements. At least."

"The COVID-19 pandemic is an unprecedented global health, social and economic crisis. Historical comparisons are few, particularly in recent decades. This tragedy constitutes nothing less than a trial for all humanity. [...] The pandemic, in other words, is now testing the capacity of our political and economic systems to cope with a global problem situated at the level of our individual interdependence, which is to say at the very foundation of our social life. [...] We equally depend on the state to help businesses of all sizes endure this trial by providing them with the financial assistance and guaranteed loans they require in order to avoid bankruptcy and retain as much of their as possible. States no longer have any qualms about spending without limits in order to save the economy ⁠— "whatever it takes!" ⁠— while just weeks ago states opposed any request to increase hospital staff, hospital beds, or emergency services, out of its obsessive concern for budgetary constraint and limiting the public debt."

"If the pharmaceutical industry will not end its greed, which is literally killing Americans, then we will end it for them... The United States pays by far the highest prices in the world for prescription drugs. This has created a health care crisis in which 1 in 5 American adults cannot afford to get the medicine they need."

"While the Exchequer might be considered the royal Bank and Treasury, while the brotherhood of St. Thomas à Becket and the Merchants of the Steel Yard appeared in the double capacity of merchants proper and of the modern loan contractors, the business now carried on by our Rothschilds and Barings, of foreign bankers and dealers in foreign bills of exchange, was the subject of a royal monopoly."

"The private bankers of England of whom we have the earliest cognizance, were in a very different position from their successors of the present day. The first were Jews, aliens in blood and religion; contemned, hated, feared, and despised. In the land of their adoption they were very soon made the victims of more barbarous cruelties and oppressions than were ever inflicted upon any people whatever."

"In A.D. 1122, a decree was issued by the Eastern emperor commanding all Venetians resident at Constantinople and other Greek ports, to quit the imperial dominions, and declaring the suspension of all intercourse between the two powers. The Venetians thus saw the most profitable branch of their commerce threatened with destruction, and during the two succeeding years they ravaged all the coasts of the empire with their fleets, capturing Rhodes, and sacking Andros, Samos, all the Ionian isles, and a portion of the Peloponnesus. There had been granted to the Venetians certain very important commercial privileges including that of having their commerce with Roumania held free from all taxation, their persons and property exempted from the jurisdiction of the Greek magistrates; and a street and section of the city of Constantinople was devoted exclusively to their residence and trade. ...[I]t was owing to the turbulence in this quarter and to the quarrel with their neighbors and rivals, "the ," in 1171, that the wrath of the emperor brought about the destructive war which followed, the great changes in the government of the Venetian republic, and the founding of its banking institution."

"The holder of an Exchequer bill does in fact hold a mortgage on all the property, both movable and immovable, in the United Kingdom; a mortgage binding in law, but more binding still in the unbroken faith of the inhabitants of the United Kingdom. Exchequer bills are a species of Government paper money... simply orders upon the Exchequer, entitling the bearer to the sum specified therein, together with interest at a fixed rate per cent, per day, until a period is named for their payment, that period being at the option of the Government, but seldom exceeding twelve months..."

"In former times... the Exchequer was literally the bank of the Lord High Treasurer; but this was at a period when the existing facilities and securities for the transfer of money were... almost wholly unknown; when bank credits, bank cheques, and bank notes had no existence; and when the whole system of pecuniary intercourse was rude and imperfect: but since the establishment of the , the Exchequer has become rather an office of accounts and control than a repository for the safe custody of cash."

"The Jews were originally introduced into England by , and to them belongs the merit of benefiting commerce by that important improvement—the inventing bills of exchange. Their industry and frugality caused them to accumulate vast sums of money, which the idleness and profusion common to the English nobility in those days enabled them to lend out at a high rate of interest upon the security of property. They were the principal artificers of the time, and wrought most of the gold and silver ornaments for the use of the churches,which on many occasions they were afterwards called upon to take as pledges for the repayment of money lent to the priors and other ecclesiastics. ...[E]ach successive monarch extorted from them large sums of money, and that frequently by the most barbarous and cruel methods. ...[A]t the general massacre of the Jews at York... the gentry of the neighbourhood, who were all indebted to the Jews, ran to the cathedral, the place where their bonds were kept, and made a solemn bonfire of the papers before the altar. ...[M]any atrocities [were] committed by the people of England upon the Jews ...Richard the First, after the massacre... banished the remainder."

"A fresh revolt of the Venetians resulted in an order... by the emperor to confiscate all their property... and to seize and imprison their persons. The doge... issued orders... to depart immediately. ...The emperor, in return... letting loose a fleet and waging a destructive war upon all the dependencies of Venice. The Venetians were aroused as never before... and in one hundred days... [o]ne hundred and thirty fully armed vessels sailed under the command of Doge Vitale Michieli II. The fleet departed for Dalmatia. Trau and Ragusa were taken and well-nigh destroyed, and the fleet sailed for the Archipelago. When off Negropont they were met by the governor, who persuaded the doge to send ambassadors to the emperor. These Venetian envoys were... detained all winter in prolix negotiations. In the meantime a... plague broke out among the fleet at ... and in the spring of 1173 a miserable remnant... of only seventeen vessels, made its way back to Venice, carrying with it the seeds of the plague. ...The imported pestilence spread itself over the city, sparing neither sex, age, nor condition; the populace accused the doge of being the author of these calamities, and when he appeared before the infuriated multitude he was murdered on the steps of the ducal palace. But out of all this misery and disorder arose a new order... Changes were made in the character of the government, limiting the powers of the doge, and Sebastiano Ziani was elected and installed in the ducal palace."

"[H]eralded by such god-mothers as War, Pestilence, and Revolution, the first banking institution of the modern world found existence. The finances of the republic were exhausted by this series of calamities; the doge, in 1171 [or] 1157 [or] at both dates,—was obliged to have recourse to a forced loan, exacted from the most opulent citizens, each being required to contribute according to his ability. The new doge, finding the revenues of the state still further disordered, the income of the government inadequate to its demands, and an expensive war with Frederick Barbarossa on his hands, felt himself obliged to resort to the same measure."

"Down to the period of Henry the First, the rents, taxes, and fines due to the King, were paid in provisions and necessaries for his household. Afterwards, in succeeding reigns, the revenues of the Crown were chiefly paid in gold and silver, but sometimes made up with horses, dogs, and birds for game: on some occasions an entire payment was made in horses and dogs singly, of which there are numerous instances to be met with in the ancient rolls of the Exchequer."

"For these later loans, in 1173, the public revenues were mortgaged for the payment of the interest at four per cent, and a board of commissioners was instituted... called "the Chamber of Loans,"... to arrange for and pay the interest to the fund holders... and to supervise the transferring of the stock."

"A great portion of the yearly revenue consisted of fines, which were paid for grants of land and confirmations of liberties and franchises of various kinds. When the receivers of the public revenue lodged the money in the Exchequer, they received a discharge for the same, called a tally. Tallies were of great and constant use [and] coeval with the... Exchequer... The word tallies is originally French—taillie, cutting. ...The sum of money which it bore was cut in notches in the wood by the cutter of the tallies, and likewise written on both sides of it by the writer of the tallies. ...[O]ne was given to the parties paying money, and the other retained at the Exchequer. It is a mistake to suppose that tallies were a means of keeping accounts. On the contrary, they were official receipts for money paid into the King's Exchequer. ...[T]hey were undoubtedly an effectual protection against forgery or fraud."

"John, experiencing an inconvenience in their absence, tempted them to return... Edward the First exceeded all his predecessors in atrocity. Fifteen thousand Jews were robbed of all they possessed, and then banished the kingdom. ...Some of the wealthiest of the Jews, having obtained the king's permission to take with them their property, loaded a ship with immense wealth and set sail; but when they had got to the mouth of the Thames the captain of the ship cast anchor, and... persuaded the Jews to leave the ship, and... he stole away from them, got on board, and set sail. ...The captain returned to the king, to whom he related the result of his scheme, and delivered up the treasure, receiving in return both honour and reward."

"After this event, no trace of the existence of the Jews in England can be found till long after the Reformation... [T]his oppressed people paid nearly one third of the whole revenue of the kingdom."

"The use of banks has been the best method yet practised for the increase of money. banks have been long used in Italy, but as I am informed, the invention of them was owing to Sweedland. their money was copper, which was inconvenient, by reason of its weight and bulk; to remedy this inconveniency, a bank was set up where the money might be pledged, and credit given to the value, which past in payments and facilitate trade. The Dutch for the same reason set up the bank of Amsterdam. their money was silver, but their trade was so great as to find payments even in silver inconvenient. this bank like that of Sweedland, is a secure place, where merchants may give in money, and have credit to trade with. besides the convenience of easier and quicker payments, these banks save the expence of casheers, the expence of bags and carriage, losses by bad money, and the money is safer than in the merchants houses, for 'tis less lyable to fire or robbery, the necessary measures being taken to prevent them."

"Money creation by private banks is a legacy of history. Banking started around the 15th, 16th century when goldsmiths started storing gold for their clients. To prove ownership customers received certificates which came to be used as a means of payment. Initially the goldsmiths gave out as many certificates as they had gold in stock, but they soon realized it was very unlikely that all customers would demand their gold at the same time. So they issued more certificates than they had gold in their vaults: money creation through private banking was born. For banks today the same applies as for goldsmiths at the time: if all customers demand their deposits at the same time—a so-called "bank run"—the bank will not be able to pay and will fail. And worse, depositors will loose their money."

"Carthage... must have been a scene of wonderful grandeur and activity. The Carthaginians were luxurious, and prone to display their wealth. ...The riches of the temples were immense, and the furniture and embellishments of private dwellings were of the costliest kind. Distant isles of the Atlantic, as well as the nearer shores of Asia and of Europe, contributed to the teeming stores of Carthage. In [this] great African republic bank-notes had their origin. "In a small piece of leather," says Æschines, the Socratic philosopher, "is wrapped a substance of the size of a piece of four drachms; but what this substance is no one knows except the maker. After this it is sealed, and issued for circulation; and he who possesses the most of this is regarded as having the most money, and as being the wealthiest man. But if any one among us had ever so much he would be no richer than if he possessed a quantity of pebbles." Of course banks must have existed for the redemption of these leather promises to pay, and the issue and currency of such notes must have been provided for by law."

"In my former letter on the new collection of antiquities from Babylon, acquired by Mr. George Smith for the trustees of the , I referred to the great light we might expect to gain from them on the chronology of the late Babylonian and Persian empires. The tablets are the commercial papers or cheques and notes of a Babylonian banking firm, trading under the name of the founder Egibi. This firm appears from its close connection with the Court to have been a sort of national bank of Babylonia... The tablets give us a complete succession of annual transactions, from the first of Nabuchadnessar to the thirty-fifth of Darius. There is one tablet dated in the fourth year Nabu pal uzur, (Nabopalassar)... [W]e are enabled to fix the date... B.C. 625 as the first year of this monarch. From this date, for more than a century, this bank appears to have carried on its business regularly, but in the month Ab, [the eleventh month, or July of the Jewish people...] B.C. 516, the revolt of Aracus against Darius took place, the firm of Egibi were unable to transact any business owing to the revolt at Babylon, and the history of this remarkable bank cannot be traced any further."

"Sir Francis Baring, "Sir Francis Baring's Observations on the Letter of Walter Boyd, Esq. to Mr. Pitt (1801) as quoted by Thomas Skinner Surr", The Present Critical State of the Country Developed; or, An Exhibition of the True Causes of the Calamitous Derangement of the Banking System, at the Present Alarming Crisis: Shewing the Essential Distinction between the Solidity of the National Bank of England and that of the Country Banks (1826) p. 7."

"The bank of Venice is reputed the first in date in the history of modern Europe; but it did not become a bank, as we understand the term, till long after its foundation. Historians inform us that the republic being hard pressed for money, was obliged, upon three different occasions, in 1156, 1480, and 1510, to levy forced contributions upon the citizens, giving them in return perpetual annuities at certain rates per cent. The annuities due under the forced loan of 1156 were, however, finally extinguished in the 16th century; and the offices for the payment of the annuities due under the other two loans having been consolidated, eventually became the Bank of Venice. ...This establishment was ruined, after passing through many changes, by the invasion of the French in 1797. The origin of modern banking may be traced to the money-dealers of Florence, who were in high repute as receivers on deposit and lenders of money in the 14th century; and banking was indeed practised at Florence in the 13th if not in the 12th century."

"[In Ancient Rome, 340 B.C.] The first care of the new consuls was to regulate the payment of debts, the only obstruction to a perfect union of the patricians and plebeians. They no longer considered the relief of debtors as a private affair, but as a general concern of the public; and therefore chose out five men of known probity, and great experience, to take an account of all the debts of the plebeians. These five were called bankers, and had the command of the public treasury to enable them to discharge their commission; which they did to the satisfaction of both parties. Those who, out of sloth and idleness, had plunged themselves into debt, either borrowed money of these bankers, giving the treasury security for it, or deposited the value of their debts in their creditors hands in effects, which were valued by the bankers. By this means the greatest part of the debtors were relieved, without doing injury to any person, and with little loss to the public. Tranquillity being thus established at home..."

"[U]pon the first day of the month Adar, proclamation was made throughout all Israel, that the people should provide themselves with half shekels, which were yearly paid towards the service of the temple, according to the commandment of God; On the 25th of Adar, they brought tables into the temple (that is, into the outward court, where the people stood) {Exodus xxx. 31.} On these lay the lesser coins, which were to provide those who wanted half-shekels for their offerings, or that wanted lesser pieces of money in payment for oxen, sheep, doves, &c. which stood there ready in the said court to be sold for sacrifices; but this supply and furnishing the people from the tables, was not without an exchange for other money or other things in lieu of money and that at an advantage [to the exchanger]: hence all those who sat at the tables were called bankers, or masters of the exchange."

"[T]he is to the Agriculture, Commerce, and Finance of Great Britain a Sun; and the Circulation of so many Millions of its paper is the basis on which its convenience, property, and safety, have hitherto rested."

"The first public institution in England partaking somewhat of the nature of a Bank was the Exchequer, founded by William the First: it still flourishes under Victoria, and, after an existence of eight hundred years its objects remain unchanged... The original name of the Exchequer was Scaccarium... not improbably derived from scaecus or scaccum, the "chess board," because a chequered cloth was used [by]... the accomptants of the English Court of Exchequer in counting the money inasmuch as the squares were understood to represent figures corresponding to the amounts placed thereon."

"Previous to, and immediately after the Norman Conquest, there was very little money in use in England: all obligations were discharged by personal service and by payments such as cattle, horses, dogs, hawks, &c. &c."

"The expulsion of the Jews created great inconvenience, as there were none either to lend money or manage foreign business. ...[T]he family of Causini... bankers in the principal cities of Italy [were] invited to England... In... time other settled in London, in the street known by their name, and famous... as the very centre and focus of monetary transactions extending... to all parts of the globe. The occupations of the Lombards, like those of the Jews, were those of the goldsmith, the pawnbroker, and the merchant; and finally that of the banker. They, too, amassed immense wealth, and had at one time in their hands an enormous amount of church revenues. [The Lombards] also accommodated the kings of England with loans of money... Each succeeding year wore away the distinctions between the Lombard goldsmith and the native Englishman; and centuries have passed since the acute Italians of the middle ages were absorbed..."

"Britain was at war alternately on two fronts—first with the American colonies... then with Napoleon... Money was needed... Pitt was relentless... in his demands on the Bank for loans. Though taxes were increased... the need continued. ...Bank reserves dwindled, and there were occasional runs. Finally, in 1797, under conditions of great tension... the Bank suspended the right of redemption of its notes and deposits in gold and silver. The principal immediate consequence... disappearance of gold and silver coins... People passed on the notes and kept the metal. ...The Bank hurriedly printed one- and two-pound notes, and it also redeemed from its vaults a store of plundered Spanish pieces of eight. ...The needs of the government continued... Loans and the resulting note issues continued to increase. ...so did prices and the price of gold. ...[I]n reflection of the distribution of power... the concern was focused not on the price of food but on the price of gold. In... 1810, the House of Commons impaneled a committee... The committee... found... an overissue of the still irredeemable... notes [and] proposed that, after a two year period, the Bank make its notes fully convertible into specie once again. Thus... there could be no increase in the price of metal. There followed in 1811 a famous debate on the nature of money and its management... In the debate... is a difference of opinion that continues to this day. Where does economic change originate? Does it begin with those [in the banks] who are responsible for money... who made the loans and thus caused the supply of notes... to increase. (From this... the stimulating effect of rising prices on production and trade.) Or does change begin with production? ...with consequent effect on the demand for loans and thence on the supply of money? In short, does money influence the economy or does money respond to the economy? The question is still asked."

"Many documents dealing with property and credit have come down to us from the Sumerian period. ...Many of the financial customs of the early Sumerian period were codified and perpetuated in the Babylonian ..."

"The temples not only owned great wealth but were active in finance. They granted loans of silver and loans of grain. Sometimes they made loans to the poor without interest and at other times they made loans at interest. Often they charged rates below the legal maximum: sometimes one half or one third... The Temple of at would lend money to slaves to enable them to purchase freedom. At Sippon, the Sun God, acting through priests and priestesses, was the chief banker. The temples were also seats of justice and depositories of documents and valuables. Such banking operations, including deposits, transfers, and loans, date back to the third millenium B.C., but did not lead to the creation of specialized professional banking firms until the n and Neo-Babylonian period."

"In the period 500-200 B.C. it was the custom in to designate the ownership of real estate by marking stones called "horoi," which meant limit or boundary. ...Certain of these gave notice that the property is encumbered, and a few say how, for how much due to whom, and on what terms. ...At about 450 B.C. the deme instructed its temple officials to obtain real security for all its loans and to place horoi on the encumbered property. ...The state itself was never mentioned in the horoi; public lending or borrowing was unusual. Groups of individuals, comprising lending clubs, often made... secured loans to friends, sometimes without interest. The horoi often refer to loan contracts on deposit with bankers or in temples."

"As the new System was getting under way, the United States was moving into war. It is part of the favoring cliche that this was the Federal Reserve's first crisis and that it met it well. This is nonsense. The Reserve Banks bought government bonds and helped sell them as the Treasury required at the interest rates the Treasury specified. Peacetime loans to private individuals can be refused. Government loans in wartime cannot. When its rates are set and its purchases of government securities specified, a central bank has no independent power. The System began its life as a routine adjunct of the Treasury, a role that required no thought."

"A greater danger to gold was war. The gold standard in the last century owed much to the intelligent management of the ... It owed much more to the British peace. In the next century warring governments would, as did that of Pitt, turn to their central banks for the money that they could not raise in taxes. And no bank, whatever its pretense to independence, would even think of resisting. Most dangerous of all would be democracy. The Bank of England was the instrument of a ruling class. Among the powers the Bank derived from the ruling class was that of inflicting hardship. It could lower prices and wages, increase unemployment. These were the correctives when gold was being lost; euphoria was excessive. Few or none foresaw that farmers and workers would one day have the power that would make governments unwilling to impose these hardships even in so righteous a cause as defense of the currency. However, it was early seen that the interests of the rich in these matters could differ from those of others. Writing in 1810, Ricardo [made that observation in a September 6 letter to the Morning Chronicle editor]... In England the triumph of Ricardo's monied class was complete or nearly so. In the United States, however, it was subject to the sharpest of challenges. In one form or another, this challenge was to dominate American politics for the first century and a half of the Republic. Only the politics of slavery would divide men more angrily than the politics of money."

"The twelve district banks and their buildings survive as branch operations. Their mechanical tasks, notably the clearing of cheques, the routine movement of currency and the management of government financial transactions, are useful and vast. But the myth of the autonomy and importance also survives. A pamphlet published in 1971 by the Federal Reserve bank of Richmond, Virginia... shows the Board of Directors... deliberating... However... the text concedes the truth. The directors... do not establish dividends, control investment policy, supervise operations... (Nor... do they appoint officers or fix salaries.). They do establish, subject to the approval of the Board of Governors, the discount rates the Reserve Bank charges on loans to member banks. This is... the rediscount rate too is exclusively the domain of central authority. ...[O]nly one [function] remains that is categorical. The Directors... provide System officials with... "grass roots" information on business conditions. ...The textbooks, without exception, cooperate to sustain the regional myth. ...Perhaps there is something to be said for perpetuating legend, enhancing local pride... But truth and reality have their claims and these are that Aldrich's concession to the countryside was unworkable and has been undone these forty years."