Magazine article The Spectator

Money Games

Magazine article The Spectator

Money Games

Article excerpt

In the ancient world, the sole sources of wealth were agricultural and mineral (no 'industry'), and minted coin the sole monetary instrument, whose value was related to its weight and the purity of its metal content (no paper money). There were no lending banks as we know them, let alone financial mechanisms for raising credit. So are there no lessons we can learn from the ancient world about our current financial plight? Au contraire.

Financial problems were nothing new. Take the second Punic War between Carthage and Rome. By 216 bc, as a result of Hannibal's ferocious assault on Italy two years earlier, Rome had run out of money. So it borrowed from its own citizens and King Hieron of Syracuse to fund its army, while also doubling its taxes. To increase money supply, the smallest coin, the bronze as, sank from ten oz. in weight (a huge size for the 'smallest' coin! ) to two.

These were government measures in the face of the direst emergency - the threat to very survival. However, the coinage was largely restabilised when the threats were at an end and remained so, with occasional declines and innovations, for nearly five hundred years. …

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