Friday, May 15

Bankers' Bonuses, Roman Style

Now this may sound very repetitive but  I'm always puzzled by how people forget history and start running around like headless chickens as soon as a recession happens. I've lived through three now, the Russian and Asian crisis of the 90's. Then the tech crash of the early 2000's and now this current credit crash. And people keep on banging on and on about it. Scratch around for obvious villains and throw rotten vegetables at them. Even Jesus got upset with bankers and guess what? They still exist.

I hope you've read the extraordinary popular delusions book son. Required reading. And oh yes. Do keep an eye out on Cicero and Cato the elder's work. Very interesting. Both of them were brilliant writers on history, economics and how people operate. I'm sure you'll come across them in your studies.

Anyway, here's a professor from your university talking about how Sulla managed to bugger up the Roman Empire when he didn't support the financial system.



Bankers' Bonuses, Roman Style | History Today
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Posted 12th January 2015, 9:15

Since antiquity, moneymen have been the target of vitriol.

Quintus Antonius Balbus (c. 82-83 BC)

Quintus Antonius Balbus (c. 82-83 BC)Today’s bankers are widely reviled. Bonus season – usually in February – gives rise to headlines such as: Fat cats getting fatter? Bankers’ bonus culture lives on as millionaires’ club tops 2,700 and It’s a very Happy New year for Goldman fat cats! The financial crisis has only increased the opprobrium.

It was ever thus: since antiquity moneymen have been the target of vitriol. Cato the Elder, writing in the second century BC, likened the act of lending money to that of murder and many literary works of the period portrayed the argentarii (bankers) as immoral.

Yet the argentarii were a vital part of the Roman economy – just as they are today. Recent research reveals that the failure of Rome’s leaders to support the bankers had a devastating effect upon the economy just as it was experiencing a period of unprecedented growth.

Dr Philip Kay of Wolfson College Oxford has produced the most detailed analysis of Rome’s economic development in the late Republic period and this week speaks at the Legatum Institute about his work. Following the Second Punic War (218 – 201 BC) Rome experienced a period of exceptional economic growth. Military success saw the Romans collect indemnities from the Syrians, Macedonians, Carthaginians and Seleucids amongst others. In the 50 years after the war 1,050 tonnes of silver arrived in the city. The result was an expansion of the money supply; partly in the form of an increase of Denarii in circulation, from 68 million in 150 BC to 240 million in 50 BC, but also in the form of bank deposits, as banks and wealthy individuals extended credit to those who wanted it. This fuelled investment in urban infrastructure and agriculture, increasing demand and stimulating Mediterranean trade, which is estimated to have increased by over 500% between 249 and 50 BC.

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