I Meet the Leading Authority on the Babylonian and Near East Tradition of Debt Cancellation

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Copy of a regular newsletter by Boudewijn Wegerif, Sweden WHAT MATTERS-77 Dear list members, Yesterday I was with an American economist who says of himself that he is a Marxist, whose godfather was Leon Trotsky, whose father was thrown in prison in the US in 1941 for advocating the overthrow of the government, who has worked for the Chase Manhattan Bank as their balance of payments expert, and who is now an authority on the Babylonian and Near East tradition of debt cancellation. I was with someone who in another guise, as musician, once auditioned to conduct the orchestra of the Stockholm Opera Company: - someone whom I had been told I would find extremely rude, with a verbal bite as sharp as ...

The Mathematical Economics of Compound Rates of Interest: A Four-Thousand Year Overview Part II

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2. Why Economies Develop Debt Crises: The Mathematics of Compound Interest The past century’s economic schoolbooks have described a universe running down from entropy. Production is assumed to be plagued by diminishing returns, so that each additional unit of input produces less and less output. Even if technology were recognized to raise the productivity of labor, capital and land over time, neoclassical models hold that each additional unit of consumption or wealth yields diminishing psychological utility. Not only will economies grow less rapidly, they will feel poorer. Large parts of the population in many countries are indeed becoming poorer and forced into debt, but the pessimistic assumptions cited above make no reference to debt. Their seeming independence from finance – and from ...

How Interest Rates Were Set, 2500 BC – 1000 AD

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Originally published in Journal of the Economic and Social History of the Orient 43 (Spring 2000):132-161 Máš, tokos and fænus as metaphors for interest accruals* * An earlier draft of this paper has benefited from comments by William Hallo, the late W. F. Leemans, Johannes Renger, Piotr Steinkeller, Cornelia Wunsch and Norman Yoffee. For the points on which I was unable to convince them, I take full responsibility. ABSTRACT. The earliest interest rates in Mesopotamia, Greece and Rome were set not economically to reflect profit or productivity rates, but by the dictates of mathematical simplicity of calculation. The interest that was born calendrically did not take the form of young animals, but rather of the unit fraction, the smallest unit fraction in each ...

Did the Phoenicians Introduce the Idea of Interest to Greece and Italy – and if so When?

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(from the Temples of Enterprise book in progress) Delivered at a symposium at the Institute of Fine Arts, New York University, March 15th-16th, 1990, this article was published in Gunter Kopcke and Isabelle Tokumaru, eds, Greece between East and West: 10th – 8th Centuries BC (Mainz: Verlag Phillip von Zabern, 1992). This paper seeks to establish that interest‑bearing debts were introduced to the Mediterranean lands from the Near East, most likely by Syrian (“Phoenician”) merchants in the 8th century BC along with their better known innovations such as alphabetic writing. Contrary to what was believed until quite recently, such debts – and for that matter, commercial and agrarian debts even without interest charges – are by no means a spontaneous and universal ...