Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
I believe the current economic construct is a result of a reversal of causation, and therefore of a conceptual error.

To wit: the 14th century saw the greatest economic (and social) collapse in European history. As happens after a biological mass extinction, there was an explosion of economic and cultural growth (call it a memetic radiation if you want) over the following century or so, in which 1) starting from an all-time low, there was sustained and rapid economic growth; 2) cultural norms were up for grabs and the traditional prohibition of usury was abandoned. This is becuase when your economy is expanding and there is lots of room for population to grow and expand, both return and interest rates can be sustainably high. So, the explosive recovery of the European economy between 1350 and 1500 laid the foundations of modern capitalism. And we're talking 5 to 10 generations here, enought to completely change the worldview of an entire civilisation.

Then around 1500 came the "age of exploration" with a greatly inflationary influx of precious metals and spices from America and Asia, plus constant warfare for about 200 years providing a keynesian stimulus to growth, plus a need for states to incur huge debts to maintain their huge armies.

So by the time the 17th century rolled along and enlightened scholars started to apply reason to economic matters, the financial system of capitalism was the natural state of things, and growth, rather than being a cause, was perceived as the effect.

And from that conceptual reversal of the causal chain come our current woes.

Those whom the Gods wish to destroy They first make mad. -- Euripides

by Carrie (migeru at eurotrib dot com) on Fri Dec 8th, 2006 at 07:11:12 AM EST
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