Reply #98: Don't mention the Rothschilds! [View All]

[Ghost Dog]

:hanged man:

From wikipedia: http://en.wikipedia.org/wiki/Colonial_scrip

Colonial scrip was not backed by gold or silver and therefore the colonies could control its purchasing power. This was similar to the "tally stick" system used by the British Empire for over 700 years. It was different from the conventional European mercantilist system of money which required governments to borrow from banks and pay interest for those loans, as gold and silver were the only regarded forms of money. Colonial scrip, were "bills of credit" created by the government, based on the credit of that government, and this meant that there was no interest to pay for the introduction of money. This went a considerable way towards defraying the expense of the Colonial governments and in maintaining prosperity. The Governments charged low interest when it loaned out this paper money to its citizens, with land as collateral, and this interest income lowered the tax burden on the people, contributing to prosperity.

The currency was born when a lack of gold and silver in the Colonies made trade hard to conduct, and a barter system prevailed. One by one, the Colonies began to issue their own paper money to serve as a medium of exchange to make trade vibrant. The Governments could then retire excess notes out of circulation by taxing the people, helping some colonies generally avoid inflation. Each colony had its own currency and some were better managed than others. It was banned by English Parliament in the Currency Act after Benjamin Franklin had explained the benefits of this currency to the British Board of Trade. Outlawing the circulating medium caused a depression in the colonies, and Franklin and many others believed it to be the true cause of the American Revolution.

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The Pennsylvania version of this currency was said to be the most effective, because they controlled the money supply and issued only enough notes so as to satisfy the demands of trade, preventing inflation. In 1938, Dr. Richard A. Lester, an economist at Princeton University, wrote that “The price level during the 52 years prior to the American Revolution and while Pennsylvania was on a paper standard was more stable than the American price level has been during any succeeding fifty-year period.” Pennsylvania established a "land bank" that allowed landowners to borrow scrip with their land as collateral. They could borrow twice the value of their land, half of it representing actual land value, and the other half representing production potential of the land. The loan was to be retired over a set period of years, with the land ownership being restored to the citizen upon payment. When the loan was fully retired, another loan could be taken out.

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I'm coming at this also from another direction. My researches into So-called "Dark Ages" post-Roman Empire Europe (as viewed by a Brit in Spain)... The fact that almost all references to non-Graeco-Romano, non-Judeo-Christian, non-Northern European, essentially, factors in 'modern' cultural, social and, say, economic history (of an Age of (relative) Light elsewhere!) tend to disappear from, or at most be glossed over in, most contemporary accounts of the 'historical record' renders me curious, raises my suspicions (the above-referenced video jumps straight from Rome to 11th century England, for example): Someone ignoring or hiding something here? Why?

For example, here's wikipedia again (such a Pandora's Box, the knowledge and ideas spread by people using internet, but constantly arousing such a frustrating desire for further knowledge, cross-references, debate and refutation/confirmation that I'm maybe planning to head back to (an Open, Free) university): http://en.wikipedia.org/wiki/Islamic_banking

During the Islamic Golden Age, early forms of proto-capitalism and free markets were present in the Caliphate,<1> where an early market economy and an early form of mercantilism were developed between the 8th-12th centuries, which some refer to as "Islamic capitalism".<2> A vigorous monetary economy was created on the basis of the expanding levels of circulation of a stable high-value currency (the dinar) and the integration of monetary areas that were previously independent.

A number of innovative concepts and techniques were introduced in early Islamic banking, including bills of exchange, the first forms of partnership (mufawada) such as limited partnerships (mudaraba), and the earliest forms of capital (al-mal), capital accumulation (nama al-mal),<3> cheques, promissory notes,<4> trusts (see Waqf), startup companies,<5>, transactional accounts, loaning, ledgers and assignments.<6> Organizational enterprises similar to corporations independent from the state also existed in the medieval Islamic world, while the agency institution was also introduced.<7><8> Many of these early capitalist concepts were adopted and further advanced in medieval Europe from the 13th century onwards.<3>

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The definition of riba in classical Islamic jurisprudence was "surplus value without counterpart." or "to ensure equivalency in real value" and that "numerical value was immaterial." During this period, gold and silver currencies were the benchmark metals that defined the value of all other materials being traded. Applying interest to the benchmark itself (ex natura sua) made no logical sense as its value remained constant relative to all other materials: these metals could be added to but not created (from nothing).

Applying interest was acceptable under some circumstances. Currencies that were based on guarantees by a government to honor the stated value <“fiat money”> or based on other materials such as paper or base metals were allowed to have interest applied to them <9> When base metal currencies were first introduced in the Islamic world, no jurist ever thought that "paying a debt in a higher number of units of this fiat money was riba" as they were concerned with the real value of money (determined by weight only) rather than the numerical value. For example, it was acceptable for a loan of 1000 gold dinars to be paid back as 1050 dinars of equal aggregate weight (i.e., the value in terms of weight had to be same because all makes of coins did not carry exactly similar weight).

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No Rothschilds, Fuggers and such in the economically thriving Islamic Golden Age, then? Hmmm...