Evidence is that a "credit economy" goes very far back. Back to the Roman Empire.
Mercatus Traiani (Trajan's market), a semi circular ancient market in Rome's historical city center. (Wikipedia)
So, apart from the roads — which go without saying — the aqueduct, sanitation, irrigation, medicine, education, wine, public baths and public order — what have the Romans ever done for us?
Well, as we pointed out on Wednesday, there is a growing view among some ancient scholars that the Monty Python boys could and should have included credit in that list. And in in a big way, since the Roman economy likely featured a lot more paper money assets than most ancient historians care to admit. (Something a lot of modern-day economists and strategists who like throwing Roman coinage supply charts into their research don’t often explain.)
W.V Harris of Columbia University is probably best known for having made and substantiated the argument. And in my opinion, it’s certainly a very compelling one. Indeed, if you love the whole “what is money?” debate, have read David Graeber’s Debt and are still fascinated by the exogenous/endogenous nature of it all, I really recommend a download of his paper A Revisionist View of Roman Money from 2006, or a read of his 2008 book The Monetary Systems of the Greeks and Romans.
So, having explained why it’s not necessarily fair to blame Roman coinage debasement for third century hyperinflation and the ultimate fall of Rome — which, ironically, was much more likely the result of technological stagnation and political upheaval (and surely anyone who has ever played the computer game Civilization could have told you that) — it’s worth delving a little deeper into how the Roman monetary system really worked, and what it might genuinely teach us about our modern day economy.
Keep reading: What have the Romans ever done for us? | FT Alphaville.