Re: Global financial - Webber view
- From: James Beck <jdbeck11209@xxxxxxxxx>
- Date: Fri, 31 Oct 2008 22:28:46 -0500
On Fri, 31 Oct 2008 11:29:04 -0700, "a425couple"
"Tron" <tronfuru@xxxxxxxxxx> wrote in ...
"a425couple" <a425couple@xxxxxxxxxxx> skrev i melding
"Tron" <tronfuru@xxxxxxxxxx> wrote ...
"Renia" <renia@xxxxxxxxxxxxxxx> skrev i melding ...
In medieval times life in Europe was quite ordered
from the top down. The average person knew
their place at the bottom of the religious, political,
and economic pecking order. To talk to god,
they had to go through the local "Holy Roman"
or catholic priest, who followed instructions
from the Pope. The words of the bible and
even more - the meaning was explained and
interpreted to them.
Martin Luther began the break away from
the Catholic Church, and the Reformation
was on with many Protestant churches forming
with a unique view of many things.
Two examples come from words best interpreted into
words for the common man as "toil" and "calling".
A man's work in the common/secular world was
described as "toil". Only if one recieved a
"calling" from God (to enter priesthood or monastary
or nunnery) would one have pride in his product.
If a young man received a "calling" he was
to leave the work of raising food etc. and devote
his life to work/labor for God. During the translations
of the Bible (by and after Martin Luther - for previously
almost always only in Latin - not language of the
people - and technological improvements like
printing presses certainly relevant)
the word "toil" was also given that calling.
Imagine what effect that had on an
average laborer? For the village blacksmith
instead of trudging from his hovel to his forge to
working all day in toil just to feed
himself, and produce (say 3 axe heads)
he now had a calling from God!
Motivation and self image certainly effects
productivity!! Imagine perhaps that now
he can complete more (say 4 axe heads in
And, same for the farmer, instead of toiling in
a field to produce 20 bushells of wheat a year,
he can be motivated to produce 25 - for his
showing of his 'laboring for the glory of God!'
So...you start with some nice propaganda, in this case "Your work is
important to God." Economic growth rises.
Remember, it does not take a lot of increase
in economic output to over time make real
changes in a group's or countries status.
If real GDP (gross domestic product) increases
just a couple percent a year, lives are really
Not so much wisdom here. Some people usually end up a lot better off,
while most scratch a long improving their situations only slightly, if
at all. That was still clear to Mill in 1871. Empircally, growth rates
of 2.5% a year or less are associated with slow decay, i.e., high
chronic unemployment and other social pathologies, as well as, the
imposition of externalities on others. It takes sustained growth of
quite a lot of percentage points to improve the average lot.
Unfortunately, once you've had that spurt, people tend to hunker down
in silos trying to protect their interests. Growth slacks off. If it
gets too low for a sustained period you start to see the formation of
a chronic underclass.
Individuals became more empowered.
They could directly talk to God and
they were of value. "I am somebody."
Also, some of the now newly allowed
religious groups, began to put a different
twist on living conditions. It became 'more'
acceptable for a 'common man' - if he were
able - to perhaps add a room or two,
to his abode.
The Protestant groups considered and wrote
a lot on the allowable and permissible ideas
of income, wealth, and usury.
The Moslems and the Roman Catholics
read that 'usury' was completely forbidden.
They had felt that any loan of money, expecting
that more money should be returned later,
You could rent your land out for a share
of the crop, or for money. But you could
not loan money out for a profit.
This is a misreading of history. Periodic bans on interest taking
occurred in the ancient world preceding Christianity, too. Interest
taking is always politically unpoular during a crisis. All of the
major religions are ascetic for a reason and the interpretation of
'usury' is sensitive to circumstance.
Circumstances were not favorable to interesting taking in Europe for a
very long time, but resumed during the MWP. By the 11th century, there
are again records of orderly interest taking in Christian Europe. As
the MWP ended, interest taking became unpopular again and you start to
see caps on interest rates in the 1200s side by side with resumption
of the case against usury. During the 1300s, the economic situation
was deteriorating and compulsory government debt was often used to pay
for wars. By 1500, the burden of government debt was crushing. France
defaulted in 1557 and again in 1597.
The 17th century is usually viewed as 'modern,' but capital markets
lagged other developments, as usual. The losses from fighting during
the Reformation wiped out most of the German banks. Spain defaulted in
1647. Theologians trotted out the old usury rules yet again. Even so,
prohibitions on usury were not necessarily ecclesiatical.
Leading writers in the reformation (like Calvin)
saw that this was a problem to economic
progress. Merchants, especially in the
area of ships for foreign trade needed
investment capital that could only come
with a reward of 'interest'. The idea of
usury being prohibited remained, but the
interpretation changed. 'Usury' was still
forbidden but instead of meaning any interest,
usury was now charging unduly large
interest, or taking advantage of a person
down on his luck and in need. Volumes
were written defining this.
A good paragraph to here.
You can easily see that
modern banking is a major factor in western
Not so good again. Growth leads banking, not the reverse. We have
sophisticated banking now, bur relatively slow growth. When China's
growth took off, they had primitive banking, but grew anyway. Banking
is an effect, not a cause of economic growth.
Many are interested to see if there might
be an Islamic Reformation. Not a conversion
to another religion, but a reinterpretation
of the meaning of laws that would fit and
help the tribes and nations of 1000, 2000,
or 3000 years ago to meet today's
I find it strange when such questions arise; those parts of the
Islamic world that have experienced rapid economc growth have already
devised sophisticated workarounds. Those still mired in slow growth
have not. A similar pattern holds for Catholic Europe.
(This consideration - of Islamic Reformation has
some real built in problems.
The Christian Bible was written by many, over
thousands of years, and has considerable
'contradictions' that are left to each believer
or pastor to consider and weigh and evaluate.
While in Islam, Mohamid was a rather singularly
top figure who wrote greatly for many years,
and really pinned down his interpretation on many
specifics - thus much is pretty much "set in concrete")
In translation, the Koran bans usury, not interest. Calvin-esque
rationalizations are already circulating. For that matter, in
translation the Koran sounds *like* Calvin. That is, the thinking is
much more modern and farsighted than most people would guess.
Personally, I think the main problem in the Islamic world is that,
having once been more successful, its disintegration has left a system
of divisive, entrenched interests. The resulting political process
isn't undemocratic per se, as much as it is paralyzed by lack of
consensus. The power of the entrenched interests is such that progress
requires a massive supermajority. Ironically, that suggests to me that
the best route forward may be the one most strongly precluded by the
jingoism of the sitting administration. That is, talk to the Imams.
Restore and enhance their prestige and social relevance.
Would most agree with the following?
In many Arab / Moslem countries:
average individuals have little political power,
average individuals have little economic power,
most individuals are guided by set religious leaders,
many religious leaders limit new critical thought.
If the dominate religious beliefs of a country
allow or encourage economic growth, the
economy and material output is likely to
Generally, where countries have greater economic
growth, they have greater political power,
better educational and research growth,
greater technology, and that often gives
greater military power.
Pretty good overall, though I evidently found the historical analysis