New Money for a New World
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64 Binyamin Appelbaum, “Fed to Take a Step Out From Behind the Veil,”New York Times (25 March 2011).
65 Edmund L. Andrews, “Greenspan Concedes Error on Regulation,” New York Times (23 October 2008).
66 Glyn Davies, A History of Money from Ancient Times to the Present Day (Cardiff: University of Wales Press, 1994), p. 27.
67 This definition has also been explored by Rabbi Nilton Bonder in his book, The Kabbalah of Money: Jewish Insights on Giving, Owning, and Receiving (Boston: Shambhala Books, 1996).
68 Money Facts by the Subcommittee of Domestic Finance, Committee on Banking and Currency, House of Representatives 88th Congress, 2nd Session (21 September 1964): “Money is anything that people will accept in exchange for goods or services, in the belief that they may, in turn, exchange it, now or later, for other goods or services.”
69 Charles F. Durban, “The Bank of Venice,” Quarterly Journal of Economics 6, no. 3 (April 1892).
70 Money Facts by the Subcommittee of Domestic Finance, Committee on Banking and Currency, House of Representatives 88th Congress, 2nd Session (21 September 1964): “Legal tender is any form of money that the U.S. Government declares good for payment of taxes and both public and private debts…This note is legal tender for all debts public and private” is written on every U.S. dollar bill. What this means in practice is the following: if you owe someone money and he/she refuses your offer to pay with dollar bills, you can walk away and simply declare the debt void. If needed, the courts will back you in such a declaration.
71 To be more accurate, while the Charter of the Bank of England dates from 1688, the monopoly of emission of paper money was assigned by 1694, when an additional 1.2 million pounds were urgently needed to fight a war against the French. In the case of Sweden, the power of emission had to be similarly transferred to the Bank of the Estates of the Realm when the crown needed urgent money to fund a war against Denmark. While the introduction of paper money made the transfer of the power of emission of money from sovereigns to banks possible, the proximate cause of that process was war.
72 John Kenneth Galbraith, Money: Whence it Came, Where it Went (London: Andre Deutsch, 1975).
73 Regulations specify that only 10 percent of a deposit need to be kept as a reserve in case the customer withdraws the funds. Therefore, up to 90 percent is available to make new loans. Changing that percentage is one of the techniques whereby the Federal Reserve controls the quantities of credit money the banks will be able to create. The exact percentages also vary with the kind of deposit made: the longer the term of the deposit, the lower the percentage of “reserves” required. The 90 percent rule of this example, enabling a “multiplier” of about nine to one, is an illustrative average.
CHAPTER FIVE - Money Is Not Value Neutral
74 Charles Handy, The Empty Raincoat (London: Arrow Business Books, 1995), p. 108.
75 A detailed description of this process is provided in Bernard Lietaer and Stefan Brunnhuber, Money and Sustainability – The Missing Link (2008).
76 John Jackson and Campbell R. McConnell, Economics (Sydney: McGraw Hill, 1988).
77 Marc van de Mieroop, “The Invention of Interest” in William N. Goetzman and K. Geert Rouwenhorst, The Origins of Value: The Financial Innovations that Created Modern Capital Markets (Oxford: Oxford University Press, 2005), p. 24.
78 Source:
79 In Islam, for example see: Gillian Tett, “Banks Create Muslim ‘Windows’ as Islamic Banking Expands its Niche,” The Financial Times (2 June 2006), p. 6: “The central religious precept driving the Islamic finance industry is the idea that riba (a word that can be translated either as “interest” or “usury”) is haram (“forbidden” or “sinful”)…At first glance, this appears to rule out most aspects of modern finance. But although the Koran bans the creation of money, by money, it does allow money to be used for trading tangible assets and businesses—that can generate a profit…Ironically, some of [the] structures and techniques [of modern Islamic banking] echo those that flourished in Christendom in Europe between the 12th and 15th centuries. The Christian Council of Nicea (325 CE) banned the practice of usury among the clergy and in 1140 this principle was extended to church members.”
80 Source:
81 Source:
82 Estelle and Mario Carota, “The Ignored Doctrine on Money” (1986) in John H. Hotson, The Comer Papers (Ontario, Canada: 1987), p. 1.
83 Andrew Lowd, in his thesis, “Alternative Currencies in Theory and Practice.”
84 Pierre Thuillier, “Darwin Chez les Samourai,” La Recherche, no. 181 (1986), p. 1276-80.
85 Elisabet Sahtouris, Earth Dance: Living Systems in Evolution (Alameda: Metalog Books, 1996).
86 David Loye, personal email to Stephen Belgin (2005).
87 David Loye, personal email to Stephen Belgin (2005).
88 David Loye, personal email to Stephen Belgin (2005).
89 Margrit Kennedy, et.al., Interest and Inflation Free Money: Creating an Exchange Medium that Works for Everybody and Protects the Earth (Okemos: Sava International, 1995), p. 26.
90 Ian Dew-Becker and Robert J. Gordon, “Where Did the Productivity Growth Go? Inflation Dynamics and the Distribution of Income,” paper presented at the 81st meeting of the Brookings Panel on Economic Activity (Washington, D.C. 8-9 September 2005).
CHAPTER SIX - Back to the Future
91 All three labels describing this period are quoted from Guy Bois, La Grande Dépression Médiévale – le XIV–XVeme siècle: le Précédent d’une crise systémique (Paris: PUF, 2000), p. 11.
92 Eva Matthews Sanford, “The Twelfth Century—Renaissance or Proto-Renaissance?” Speculum 26 (1951), p. 635-42. See also: Warren Hollister, ed., The Twelfth Century Renaissance (New York: John Wiley & Sons, 1969); Charles Young, ed., The Twelfth Century Renaissance (Melbourne, FL: Krieger Publishing Company, 1977); Chris Ferguson, Europe in Transition: A Select, Annotated Bibliography of the Twelfth-Century Renaissance (New York, London: Taylor & Francis, 1987); Jacques Verger, La Renaissance du XIIe Siècle (Paris: Editions du Cerf, 1996).
93 Robert Delort, La Vie au Moyen Age (Lausanne: Editta, 1982), p. 45.
94 Bois, La Grande Dépression, p. 16.
95 Marcel Bloch quoted in Bois, La Grande Dépression, p. 15.
96 Guy Fourquin, Histoire Economique de l’Occident Medieval (Paris: Armand Collin, 1969), p. 215.
97 Francois Icher, Les Oeuvriers des Cathédrales (Paris: Editions de la Martinière, 1998), p. 20.
98 Bois, La Grande Dépression, p. 21.
99 Bayard, La Tradition Cachee, p. 42.
100 Robert L. Reynolds, Europe Emerges: Transition Toward an Industrial Worldwide Society, 600-1750 (Madison: University of Wisconsin Press, 1967), p.185-6
101 R. Philippe, L’Énergie au Moyen Age: L’Exemple des Pays d’Entre Seine et Loire de la fin du XIeme Siècle a la fin du XVeme Siècle (Paris: 1982).
102 Frances and Joseph Gies, Cathedral, Forges and Waterwheel: Technology and Invention in the Middle Ages (New York: Harper Perennial, 1995), p. 107.
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bsp; 103 Robert Lacey and Danny Danzinger, The Year 1000: What life was like at the turn of the first Millennium (London: Little Brown & Co., 1999), p. 87.
104 Bois, La Grande Dépression, p. 52.
105 Alex Werner, ed., London Bodies: The Changing Shape of Londoners from Prehistoric Times to the Present Day (London: Museum of London, 1998), p. 108. The sizes of the bodies are based on bone lengths and are therefore subject to error. “But where large samples are involved as here, the error is a constant that can be ignored for the purposes of comparison.”
106 See for instance, Georges Duby, Europe des Cathédrales: 1140-1290 (Geneva: Skira, 1966).
107 Sacheverell Sitwell, The Gothick North: A Study of Medieval Life, Art, and Thought (Boston: Houghton Mifflin, 1929).
108 Delort, La vie au Moyen Age, p. 211-2.
109 H. Kraus, A Prix d’Or: le Financement des Cathédrales (Paris: Cerf, 1991). It should be noted that abbeys do not fit into this general rule: they were built and owned by the order that lived there. The bulk of the financing for the abbeys came from donations of land or other endowments by nobility.
110 Barbara Schock-Werner, “Le Chantier de la Cathédrale de Strasbourg,” Chantiers Médiévaux (Editions du Zodiaque, DDB, 1995). The funding for each cathedral was by a special legal and financially-independent institution, called “la Maison de l’Oeuvre Notre Dame.” One of the most complete records relates to the cathedral of Strasbourg in Alsace, France. In 1206, the Oeuvre Notre Dame at Strasbourg consisted of a committee of citizens, including the local Bishop. However, from 1230 onwards the role of the Bishop and clergy dropped to the point that after 1262, the Bishop was completely excluded from the committee. In 1290, “L’Oeuvre Notre Dame” became an official municipal function. It has remained so to this day, with a brief exception after the French Revolution (1789 to 1803), when it was controlled by the French State (“Régie des Domaines”).
111 Bois, La Grande Dépression, p. 11.
112 Fourquin, Histoire Économique de l’Occident Médiéval, p. 192.
113 Henry S. Lucas, “The Great European Famine of 1315-1316,” Speculum 5, no. 4 (1930), p. 343-77
114 Chronicle of Gilles Le Muisit, abbot of Saint-Martin de Tournai (1272-1352) in Textes et documents d’histoire du Moyen Age, XIVe-XVe siècles, tome 1, S.E.D.E.S. (Paris: 1970), p 8-9. See also: R. Fossier, Le Moyen Age, le temps des crises (1250-1520) (Paris, 1997). A. Colin and Jean Delumeau, Les malheurs des temps. Histoire des fléaux et des calamités en France (Paris: Larousse, 1987).
115 Lucas, “The Great European Famine of 1315-1316,” Speculum 5, no. 4 (1930), p. 343-77.
116 Daniel Power, ed., The Central Middle Ages (Oxford University Press, 2006), p. 60.
117 Bois, La Grande Dépression, p. 93-4.
CHAPTER SEVEN - A Change of View
118 The late medieval social order was constituted by God’s Three Estates, in which the Church, nobility, and masses were each to serve one another to the benefit of all. According to historian Barbara Tuchman, “The clergy was to pray for all men, the knights to fight for them, and the commoner worked that all might eat.” This plan derived from the early Christian notion of mankind’s fall from an original state of grace.
119 The concentration of wealth took several centuries to be established and all its effects were not negative. For instance, patronage by the elite gave birth to what became later known as the Renaissance.
120 From the writings of early church father St. Augustine of Hippo.
121 The French Philosopher Alexandre Koyré coined the term and definition of “The Scientific Revolution” in 1939, which is often dated as having begun in 1543, the year in which Nicolaus Copernicus published his De revolutionibus orbium coelestium (On the Revolutions of the Heavenly Spheres), and Andreas Vesalius published his De humani corporis fabrica (On the Fabric of the Human body). Although this period is commonly dated to the 16th and 17th centuries, some see elements contributing to this shift as early as the Middle Ages. See: Edward Grant, The Foundations of Modern Science in the Middle Ages: Their Religious, Institutional, and Intellectual Contexts (Cambridge: Cambridge University Press, 1996).
122 See the Needham Research Institute website:
123 Source:
124 Both Isaac Newton and Gottfried Wilhelm Leibniz are usually both credited with the invention of calculus. Newton was the first to apply calculus to general physics and Leibniz developed much of the notation used in calculus today. By Newton's time, the fundamental theorem of calculus was known.
125 Some historians differentiate between the Age of Reason in the 1600s and the Age of Enlightenment in the 1700s. For our purposes, the Age of Enlightenment referred to in this book includes both these intellectual movements.
126 Source:
127 To be more accurate, while the Charter of the Bank of England dates from 1688, the monopoly of emission of paper money was assigned by King William of Orange to that institution only in 1694, when he urgently needed an additional £1.2 Million for a war against the French. See also:
128 For more information see:
129 Michael D. Bordo, The Concise Encyclopedia of Economics. “England adopted a de facto gold standard in 1717 after the master of the mint, Sir Isaac Newton, overvalued the guinea in terms of silver, and formally adopted the gold standard in 1819.”
130 Voltaire, The Works of Voltaire, Vol. VII, Philosophical Dictionary Part 5 (1764).
131 Personal communication with Alec Tsoucatos (June 15, 2005).
132 For more information see: David Dugan and Alan Macfarlane , The Day the World Took Off (University of Cambridge).
133 Alfred W. Crosby, The Measure of Reality: Quantification and Western Society 1250-1600 (Cambridge: Cambridge University Press, 1998).
134 This supposition is made because the success of the French experiment with local currencies seemed to have disappeared in the mist of time.
135 The Technocratic Materialistic Mechanistic (TMM) model is a term coined by Anne Wilson Schaef, in Living in Process: Basic Truths for Living the Path of the Soul (New York: Ballantine Wellspring, 1999).
CHAPTER EIGHT - Economic Myopia
136 Eric Beinhocker, The Origins of Wealth Complexity, and the Radical Remaking of Economics (Cambridge, Massachusettes: Harvard Business School Press, 2006). “Many earlier economists, such as Smith (and Bentham) regarded themselves as philosophers rather than scientists, and the mathematics of the Classical periods is generally limited to a few numerical examples and a bit of algebra, but nothing more sophisticated.”
137 Eric Beinhocker, The Origins of Wealth Complexity, and the Radical Remaking of Economics (Cambridge, Massachusettes: Harvard Business School Press, 2006). “Many earlier economists, such as Smith (and Bentham) regarded themselves as philosophers rather than scientists, and the mathematics of the Classical periods is generally limited to a few numerical examples and a bit of algebra, but nothing more sophisticated,” p. 67.
138 Eric Beinhocker, The Origins of Wealth Complexity, and the Radical Remaking of Economics (Cambridge, Massachusettes: Harvard Business School Press, 2006). “Many earlier economists, such as Smith (and Bentham) regarded themselves as philosophers rather than scientists, and the mathematics of the Classical periods is generally limited to a few numerical examples and a bit of algebra, but nothing more sophisticated,” p. 24. A more complete but more cumbersome definition for Traditional Economics is: “the set of concepts and theories articulated in undergraduate and graduate-level textbooks. It also includes the concepts and theories that peer-reviewed surveys claim, or assume, the field generally agrees on.”
139 Eric Beinhocker, The Origins of Wealth Complexity, and the Radical Re
making of Economics (Cambridge, Massachusettes: Harvard Business School Press, 2006). “Many earlier economists, such as Smith (and Bentham) regarded themselves as philosophers rather than scientists, and the mathematics of the Classical periods is generally limited to a few numerical examples and a bit of algebra, but nothing more sophisticated,” p. 67.
140 Eric Beinhocker, The Origins of Wealth Complexity, and the Radical Remaking of Economics (Cambridge, Massachusettes: Harvard Business School Press, 2006). “Many earlier economists, such as Smith (and Bentham) regarded themselves as philosophers rather than scientists, and the mathematics of the Classical periods is generally limited to a few numerical examples and a bit of algebra, but nothing more sophisticated,” p. 67.