Topic: History

Quotes

A.N. Whitehead, An Introduction to Mathematics (1911)

• It is a profoundly erroneous truism, repeated by all copy-books and by eminent people when they are making speeches, that we should cultivate the habit of thinking of what we are doing. The precise opposite is the case. Civilization advances by extending the number of important operations which we can perform without thinking about them. Operations of thought are like cavalry charges in a battle—they are strictly limited in number, they require fresh horses, and must only be made at decisive moments.#Quoted in F.A. Hayek, The Constitution of Liberty (1960)

Adam Smith, Lectures on Jurisprudence (1763)

• Love which was formerly a ridiculous passion became more grave and respectable. As a proof of this it is worth our observation that no ancient tragedy turned on love, whereas now it is more respectable and influences all the public entertainments.#

Aldous Huxley, Brave New World (1939)

• Assuming that we are capable of learning as much from Hiroshima as our forefathers learned from Magdeburg, we may look forward to a period, not indeed of peace, but of limited and only partially ruinous warfare.#
• Rapid technological changes, taking place in a mass-producing economy and among a population predominantly propertyless, have always tended to produce economic and social confusion. To deal with confusion, power has been centralized and government control increased.#

Anthony De Jasay, The State (1985)

• As kings from medieval times sought to lessen their dependence on the nobility by soliciting the support of town burghers, so did the state in more modern times emancipate itself from the bourgeoisie by enfranchising and buying the votes of successively broader masses of people.#
• It would seem that the more governments came to rely on popular support (in England in the last third of the nineteenth century), the more willing they became to arouse demands for change instead of letting sleeping dogs lie.#

Arthur Melzer, Philosophy Between the Lines (2014)

• In traditional society, it was common to ask, “can an atheist be an honest man?”; in modern society, the question has become “can a believer be a tolerant man?” Just as the former society demands unity and strength of belief, so the latter tends to demand pluralism and skepticism.#
• What it means, on the deepest level, for a society to be “traditional” is not merely that its subjects happen to follow old habits and customs, but that, on some level, they understand themselves to be fallen from the originary fullness of the world, from the divine era; that they live in remembrance and repentance, in hunger for the past.#
• Classical philosophy was defined against nonphilosophic life and the realm of commonsense “opinion” out of which it emerged. Modern philosophy, by contrast, is defined against an existing false philosophy, against scholasticism, and so has a far more academic and historically contingent character.#

Axel Leijonhufvud, “Costs and Consequences of Inflation” (1975)

• Monetary exchange systems have not evolved out of non-monetary exchange (“barter”) systems but out of non-exchange systems. . . . “Custom and Command”, in the terms of Classical Economics, or “Reciprocity and Redistribution”, in those of Anthropology, – not barter exchange – are the alternatives to monetary exchange.#
• In largely non-monetary economies, important economic rights and obligations will be inseparable from particularized relationships of social status and political allegiance and will be in the same measure permanent, inalienable, and irrevocable.#

Barry Eichengreen, Golden Fetters (1992)

• The credibility of the authorities’ commitment to gold proved more elusive than Hawtrey supposed. Britain, for example, was unable to resist a speculative crisis in 1931 despite restoring sterling’s prewar parity. France, in contrast, remained securely on gold even though it stabilized the franc at a depreciated level. Restoring the prewar parity was neither necessary not sufficient for the “preservation of public good faith”. The credibility the public vested in the official commitment to gold depended rather on political priorities and the political institutions adopted to facilitate their pursuit. Of the determinants of those priorities, the very experience with inflation and stabilization in the 1920s was surely the most important. Where stabilization was successfully achieved only at the conclusion of a contentious and politically exhausting fiscal war of attrition, political leaders and electors were willing to go to extraordinary lengths to prevent a replay of the conflict. They sought to retain the gold standard, the symbol of fiscal compromise, at any cost. Ironically, it was precisely those countries that returned to gold at devalued parity following a long, politically disruptive inflation that displayed the firmest resolve to defend the gold standard when it again came under attack.#
• In countries where the elasticity of bank money was lower, adjustment [to balance of payments equilibrium] might still require substantial gold movements. In the United States, for instance, where the currency supply was notoriously inelastic, large gold inflows and outflows regularly occurred not just over the cycle but across the seasons.#

Bruno Leoni, Freedom and the Law (1961)

• Everybody today pays lip service to the Romans no less than to the English for their legal wisdom. Very few realize, however, what this wisdom consisted in, that is, how independent of legislation those systems were in so far as the ordinary life of the people was concerned, and consequently how great the sphere of individual freedom was both in Rome and in England during the very centuries when their respective legal systems were most flourishing and successful.#
• The free market was at its height in the English-speaking countries when the common law was practically the only law of the land relating to private life and business. On the other hand, such phenomena as the present acts of governmental interference with the market are always connected with an increase in statutory law and with what has been called in England the “officialization” of judiciary powers, as contemporary history proves beyond doubt.#

Bruno Leoni, The Law and Politics (1964)

• The Romans enacted many statutes during their history, but those statutes related mainly to the functioning of their own government, and extremely rarely to private relationships between individuals. We have records of only about 50 statutes enacted by the Roman legislative powers relating to private relationships among citizens throughout their history – embracing more than 1,000 years.#

Caroline Humphrey, “Barter and Economic Disintegration” (1985)

• Barter in the present world is, in the vast majority of cases, a post-monetary phenomenon (i.e. it coexists with money), and that it characterises economies which are, or have become, de-coupled from monetary markets.#

Charles Franklin Dunbar, “The National Banking System” (1897)

• The banking history of the United States has been for the most part a succession of catastrophic changes rather than a process of steady growth.#

Charles Murray, Human Accomplishment (2003)

• By and large, it has not been Asian or Arabic scholars, fighting for recognition against European indifference, who are responsible for piecing together the record of accomplishment by non-European cultures, but Europeans themselves. Imperialists they may have been, but one of the by-products of that imperialism was a large cadre of Continental, British, and later American scholars, fascinated by the exotic civilizations of Arabia and East Asia, who set about uncovering evidence of their accomplishments that inheritors of those civilizations had themselves neglected.#
• Even more startling are the words of Plutarch about Phidias, whose artistic works were regarded by the ancients with the awe that we accord Michelangelo’s: “No gifted young man upon seeing the Zeus of Phidias at Olympia ever wanted to be Phidias. For it does not necessarily follow that, if a work is delightful because of its gracefulness, the man who made it is worthy of our serious regard.” That the Romans could so reverently admire a work of art and so scorn the person who created it is perhaps part of the reason that the Romans left us so little of their own creation in the arts and sciences.#

Daron Acemoglu, “The Colonial Origins of Comparative Development” (2001)

• Independence of most Latin American countries came in the early nineteenth century as domestic elites took advantage of the invasion of Spain by Napoleon to capture control of the state. But, the only thing that changed was the identity of the recipients of the rents.#

Doug North, Understanding the Process of Economic Change (2005)

• The movement from personal to impersonal exchange always increases total transaction costs but the consequence is a drastic reduction in production costs, which more than offset the increased resources going into transacting – and was responsible for the dramatic growth of modern economies.#
• It should be emphasized that the institutions that have emerged in the Western world, such as property rights and judicial systems, do not have to be faithfully copied in developing countries. The key is the incentive structure that is created, not the slavish imitation of western institutions. Starting with the household responsibility system, the Chinese developed an incentive structure which managed to produce rapid economic development without any of the standard recipes of the West. However, down the road the Chinese must embed the incentive system in the political/economic structure if they are to continue their rapid development and that will probably require institutions that come much closer to having the adaptively efficient features of western societies.#

Doug North, Violence and Social Orders (2009)

• All exchange in limited access order is dominated by personal knowledge.#
• The Romans developed rule of law for organizations, but they never solved the problem of perpetual life.#
• Solving the problem of constraining its leaders required that the church define itself as a perpetually lived organization.#
• The personal nature of sovereign debt in a natural state meant that all early modern European sovereigns were credit rationed, and the Stuart kings could not raise much money to finance their governments. After the Revolution of 1688, sovereign debt became the impersonal liability of parliament.#
• [Adam Smith’s] low opinion of corporations in general reflected less on the economic and organizational aspects of joint-stock businesses than on the natural state’s political effects of chartering – the corrosive effects of corporate privileges given to towns, guilds, and monopolies. Although much of the debate about Smith’s view of corporations has focused on his view about their efficiency, Smith saw corporations in a traditional Whig manner: grants of economic privilege used to secure political advantage. As late as 1776, the founder of modern economics viewed corporations largely in natural-state terms – as tools for the political manipulation of the economy.#
• Charters created rents even when charters did not confer monopolies because the ability to access the corporate form in itself was a substantial advantage to any economic organization.#
• The birth of the nation-state did not occur with the apotheosis of the ruler, but by subsuming the personal identity of all rulers in a durable and perpetual corporate organization of the state.#

Edward Gibbon, The History of the Decline and Fall of the Roman Empire (1891)

• The various modes of worship, which prevailed in the Roman world, were all considered by the people as equally true; by the philosopher as equally false; and by the magistrate as equally useful.#Quoted in Arthur Melzer, Philosophy Between the Lines (2014)

Elinor Ostrom, “Beyond Markets and States: Polycentric Governance of Complex Economic Systems” (2010)

• While utility was originally conceived of as a way of combining a diversity of external values on a single internal scale, in practice it has come to be equated with one externalized unit of measure—such as expected profits.#

Erwin Dekker, The Viennese Students of Civilization (2016)

• The liberal movement in Vienna had started around the celebration of German cultural heroes such as Goethe or Schiller. Communities can never be sustained without a shared identity and shared symbols.#

F.A. Hayek, “The Trend of Economic Thinking” (1933)

• It is probably no exaggeration to say that economics developed mainly as the outcome of the investigation and refutation of successive Utopian proposals.#Quoted in Erwin Dekker, The Viennese Students of Civilization (2016)

F.A. Hayek, Prices and Production (1935)

• Anyone who has studied the monetary literature of the first half of the nineteenth century will agree that there is hardly any idea in contemporary monetary theory which was not known to one or more of the writers of that period.#

F.A. Hayek, The Constitution of Liberty (1960)

• The decisive factor which made the efforts of the [French] Revolution toward the enhancement of individual liberty so abortive was that it created the belief that, since at last all power had been placed in the hands of the people, all safeguards against the abuse of this power had become unnecessary.#

Fustel De Coulanges, The Ancient City (1864)

• Among all ancient nations the law had been subject to, and had received all its rules from, religion. Among the Persians, the Hindus, the Jews, the Greeks, the Italians, and the Gauls, the law had been contained in the sacred books or in religious traditions…. Christianity is the first religion that did not claim to be the source of law…. Men saw it regulate neither the laws of property, nor the orders of succession, nor legal proceedings. It placed itself outside the law, and outside all things purely terrestrial. Law was independent; it could draw its rules from nature, from the human conscience, from the powerful idea of the just that is in men’s minds. It could develop in complete liberty.#Quoted in Arthur Melzer, Philosophy Between the Lines (2014)

G.L.S. Shackle, Epistemics and Economics (1972)

• If we stand back from the claim that explanation and prediction are one, in practice and not merely in principle, we shall surely be impressed with their contrasting nature. To be allowed to taste a cake and be asked what were the ingredients is not the same thing as to be given some ingredients and be asked what can be made of them. #

Georg Simmel, The Philosophy of Money (1907)

• Metal money stands on an equal basis with paper money as a result of the growing psychological indifference to its value as metal.#
• When the Bank of England ceased to redeem its notes between 1796 and 1819 the fall in the value of gold was only 3–5 per cent, but commodities prices rose 20–50 per cent as a result!#
• If the profit from debasement of the coinage had not been contingent upon the size of the area, the chaos of coins in Germany would have been much worse, because of the terrible frivolity with which the privilege of coinage was granted to every monastery and every small town.#
• The fixed residences of princes, which require centralization, are possible only with the emergence of money taxes, for taxes paid in kind cannot be transported and they are appropriate only to a wandering court which consumes them as it goes. It is in the same spirit that modern tax policy tends to leave taxes on real property to local authorities, and to reserve income tax for the state. By focusing the tax demands of the central power upon the money income of the individual, it grasps precisely the kind of property with which it has the closest relation. #
• Because the wealth of the Jews consisted of money, they became a particularly sought-after and profitable object of exploitation, for no other possessions can be expropriated as easily, simply and without loss. . . . The same specific character of money as lacking in any specific determinacy which made it the most suitable and the least refusable source of income for the Jews in their position as pariahs, also made it the most convenient and direct incentive for exploiting them.#
• The financial importance of some Florentine families during the Medici period was based on the fact that they were banished by the Medici or deprived of their political power.#
• Very crass social differences and the insurmountable distance between classes usually go hand in hand with social harmony. The call for egalitarian reforms or for revolutions is usually raised only after the rigidity of class barriers has been alleviated and a livelier movement within society has brought about certain intermediate transitional phenomena and a degree of contact between the social orders which allows mutual comparison. As soon as this happens, however, the lower classes become aware of their subjugation and the upper classes of their moral responsibility as well as their interest in defending their position, and social harmony is disrupted.#
• Those professional classes whose productivity lies outside the economy proper have emerged only in the money economy—those concerned with specific intellectual activity such as teachers and literary people, artists and physicians, scholars and state officials. As long as a barter economy prevails there are only very few of them and then mostly on the basis of substantial land ownership. This is the reason why, during the Middle Ages, the Church, and to some extent the nobility, were the supporters of intellectual life.#
• The intellectual flowering of Florence in comparison with Genoa and Venice, which were equally wealthy and endowed with talents, has been attributed partly to the fact that these two had become rich during the Middle Ages largely through commerce, whereas the Florentines, ever since the thirteenth century, had become rich mainly as bankers. The nature of banking required less specific work and left them more freedom for the development of higher interests!#
• The binding of the peasants to their economic position, the binding of their existence to their possessions, runs parallel to the decline of the money economy.#
• The development of private property originally and most intensively did not take up the products of labour as such but the tools of labour, including weapons. For tools function most directly as extensions of the limbs, and the resistance of the objects against our impulses is usually experienced only at their end-point. The activity factor present in owning tools is greater than for other possessions and therefore, next to the body, they are the possession that is most completely incorporated into the Ego.#
• Until well into the Middle Ages, the English clergy did not form a unified group. In particular, the bishops as feudal lords belonged to the lords and were socially and politically distinct from the lower clergy. This was true as long as taxes were imposed only on landed property, of which the lower clergy had no part. As soon as the special taxation of all clerical income was introduced, a common interest for the whole stratum was created, either in terms of their opposition to it or acceptance of it. An expert on that period considers this event to be one of the most important bonds that first made the clergy a unified estate.#

George Mendenhall, “Law and Covenant” (1954)

• There was no independent religious tradition in the pagan nations of the ancient world which had enough vitality and support to become the basis for a condemnation of royal policy while the king was still alive.#
• Since the punitive acts of a god tend to be natural calamities such as plague, drought, and famine which strike the entire community, religious sanctions tend at least to reinforce, if not to produce, the concept of corporate responsibility which is a characteristic of the early stages of legal thought in the ancient world.#
• It is not at all likely that the Code of Hammurabi was intended to displace all other legal traditions within the Empire. At least it is quite certain that it did not do so . . . Whatever the purpose of the code, it cannot have been positive law binding all judges in their decisions, but was simply description of a legal tradition resting, it is believed, largely upon earlier collections of laws.#
• Babylonian language lacks any Idiom which could be translated as “against the law”‘ or “in accordance with the law,” i.e. the written codi”ed law.#
• The one factor which held the [Israelite] tribes together at all was the religious bond which imposed upon them common religious obligations, not a common political law enforced by central authority.#
• The law of an “eye for an eye, and a tooth for a tooth” was originally a measure of protection. It contrasted originally to the Song of Lamech (Gen. 4:23-24), and is simply the classical legal policy that legal responsibility is limited to the extent of injury done.#
• In early Israel, history, cultus, and “law” were inseparable, and the history of Israelite religion is not the history of the gradual emergence of new theological concepts, but of the separation and recombination of these three elements so characteristic of Israelite religion, over against the mythological religions of their pagan neighbors.#
• In the establishment of a[n Israelite] monarchy, the older religious traditions were both a tremendous asset in the feeling of unity they produced, and a tremendous liability in the very independence and autonomy under Yahweh which they fostered.#

George Selgin, The Theory of Free Banking (1988)

• The Bank of England was in a sensitive position: if it overissued, it lost specie abroad, which eventually necessitated either contraction or suspension of payments. If it underissued, it made the conversion of deposits to notes at other English banks impossible.#

George Selgin, “Bank Lending ‘Manias’ in Theory and History” (1992)

• Historical banking booms have typically involved falling rather than rising rates of interest until their final stages. This means that banking booms have usually been driven, not by changes in the demand for credit, but by rightward shifts in bank credit supply schedules.#

H. Stuart Hughes, “Is the Intellectual Obsolete?” (1956)

• By the 18th century there had come about that radical change that converted the characteristic European intellectual from a defender and rationalizer of existing institutions into their implacable critic. #Quoted in Erwin Dekker, The Viennese Students of Civilization (2016)

Israel Kirzner, How Markets Work (1997)

• It is true that Mises did not draw special attention to the mutual learning that must occur during the entrepreneurially-driven process of equilibration. Nor did Hayek emphasise the speculative, entrepreneurial character of the market process. But . . . these two ways of articulating a theory of market process turn out to be two sides of the same coin.#

J.R. Hurford, “The Evolution of the Critical Period for Language Acquisition” (1991)

• Modern language gives absolutely no clue whether reproduction or survival was the main channel through which selection pressure for language operated, or indeed whether either was primary.#

Jacob Frenkel, “Flexible Exchange Rates, Prices, and the Role of “News”: Lessons from the 1970s” (1981)

• The reversal of the relation between the U.S. interest and the external value of the dollar which has taken place since mid 1979, indicates that currently the prime cause for fluctuations in U.S. interest rates is not variations in inflationary expectations but rather variations in the real rate of interest which are occasioned by large U.S. budget deficit.#
• To some extent the overall poor performance of the purchasing power parities doctrine is specific to the 1970s. During the floating rates period of the 1920s, the doctrine seems to have been much more reliable.#

James Buchanan, Cost and Choice (1969)

• The familiar statement, ‘‘The post offices built during the 1930’s cost very little in terms of sacrificed alternatives’’ tends to be misleading. These projects did involve genuine opportunity costs to the decision-makers, and these were represented as the prospective values of other public and private projects that were never undertaken. The issue of currency, to the extent that this was carried out in the conditions of the 1930’s, was the choice that should have cost very little in terms of sacrificed alternatives.#

James Buchanan, Economics: Between Predictive Science and Moral Philosophy (1987)

• In a real sense, Western societies have attained universal suffrage only after popular democracy has disappeared. The electorate, the ultimate sovereign, must, to an extent not dreamed of by democracy’s philosophers, be content to choose its leaders.#

James Buchanan, The Logical Foundations of Constitutional Liberty (1998)

• For the best part of three decades, economists tried to use a perception designed to isolate features of a macroeconomy in deflationary expectational chaos to look at a macroeconomy in postwar boom. The supreme folly of the Keynesians was perhaps the genuinely held but arrogant opinion to the effect that the surge in unemployment and output was itself a consequence of the application of the Keynesian policy tools.#

Jeffrey Frankel, “Empirical Research on Nominal Exchange Rates” (1995)

• Positive U.S. money surprises [in the early 1980s] were associated with appreciations of the dollar at the same time that they were associated with increases in interest rates, leading the authors to conclude that: (1) during this period the Federal Reserve was expected to correct any deviations of the money supply from its target path; and (2) expectations of monetary contraction tend to raise real interest rates and cause the currency to appreciate . . . [But] the money announcements lost much of their impact later in the 1980s, after the Fed began to put less emphasis on its M1 targets.#

Jiang Quing, “From Mind Confucianism to Political Confucianism” (2011)

• In traditional society, organizations were comparatively simple and people were relatively isolated from each other. As a result, traditional evils primarily manifested in individuals’ bad behaviors, which could be remedied through individuals’ self-reflection or religious practice. In contrast, modern society is highly organized and specialized, and evils manifest themselves primarily in highly organized or collective forms that cannot be readily cured by ordinary religious beliefs. Such modern evils can only be dealt with through institutional solutions, since only institutions have sufficient power to cope with organized evils.#

Joel Mokyr, “Distributional Coalitions, the Industrial Revolution, and the Origins of Economic Growth in Britain” (2007)

• The regional fragmentation of premodern economies had not meant usually political competition, but rather constituted a balkanized system of local monopolies that impeded the workings of the national economy, protecting niches of inefficiency from competition.#

John Stuart Mill, On Liberty (1859)

• What little recognition the idea of obligation to the public [by a ruler] obtains in modern morality is derived from Greek and Roman sources, not from Christian.#

L Randall Wray, “The Credit Money, State Money, and Endogenous Money Approaches: A Survey and Attempted Integration” (2004)

• It has long been speculated that money predates writing because the earliest examples of writing appear to be records of monetary debts—meaning that the closely intertwined chronology of the development of writing and money will make it impossible to find a written history.#

Lawrence White, Competition and Currency (1989)

• Bank note producers did not gain a foothold in the currency industry until they could produce trustworthy currency cheaply enough in competition with specie.#

Lawrence White, Free Banking in Britain (1995)

• The English ‘one-reserve system’, whereby the Bank of England alone held substantial specie, was, as Bagehot explains, the product neither of conscious design nor of natural market evolution. It was instead ‘the gradual consequence of many singular events, and of an accumulation of legal privileges on a single bank’.#
• If Scottish banks did not hold Bank of England liabilities, or deposits at London banks (which in turn held Bank of England liabilities) as reserves, then the Scottish money stock was not specifically geared to the quality of Bank of England liabilities. In the long run, Scotland’s money stock was determined by the quantity of money demanded at the given purchasing power of the monetary unit. The purchasing power of the monetary unit was in turn determined by global supply and demand for gold.#
• In the crisis of 1839 the Bank of England turned to the Bank of France for an emergency extension of credit, to meet severe liquidity needs that had brought the BOE close to suspending payments. The Bank also arranged for sizeable credits in Hamburg. Yet no one would say that the London banking system customarily ‘depended’ on the Bank of France, or the Hamburg market, as a lender of last resort. Still less would anyone say that the London banking system was a ‘satellite’ to the Paris centre.#
• That the Bank of England had the power (in the short run) to alter the total supply of credit at the margin, and thereby to disturb interest rates, does not mean that any firm drawing on the total pool of funds in London was explicitly or implicitly borrowing from the Bank of England.#
• The issue of notes flowed naturally out of the business of receiving money in deposit and relending it. The great and widespread reputation of trustworthiness necessary to conduct that business made the banker’s promissory notes more generally acceptable in transactions than the commercial notes or bills of other merchants, thereby putting the banker in a position profitably to exchange his notes for commercial bills. #

Lawrence White, The Clash of Economic Ideas (2012)

• A likely contributing factor to measured velocity’s going off its previous track was the deregulation of interest on bank accounts. If so, then the adoption of a banking reform that Friedman supported ironically undermined the case for monetary reform he had supported to that point.#

Ludwig Lachmann, Capital and Its Structure (1956)

• The two greatest achievements of [economic] science within the last hundred years, subjective value and the introduction of expectations, became possible only when it was realized that the causes of certain phenomena do not lie in the ‘facts of the situation’ but in the appraisal of such a situation by active minds.#

Ludwig Lachmann, The Legacy of Max Weber (1971)

• It is true that in explaining recurrent patterns of action, the essential subject-matter of all social sciences, we cannot provide such explanation in terms of purposes, as elements of plans, because the purposes pursued by millions of people are of course numbered in millions. But often we are none the less able to provide explanations in terms of the elements common to all these plans, such as norms, institutions, and sometimes institutionalized behaviour, the maximization of profits, or the avoidance of the risk of insolvency. As long as we are able to account for the recurrence of patterns of action in terms of such elements of plans, we are successfully employing the classical method of interpretation.#

Ludwig Von Mises, Omnipotent Government (1944)

• Absolutism was not abolished; it simply collapsed.#
• It is true that many fictions and doctrines, today generally or in the main refuted and therefore called myths, have played a great role in history. But they played this role not as myths but as doctrines considered true.#
• Both private property and territorial sovereignty can be traced back to a point where somebody either appropriated ownerless goods or land or violently expropriated a predecessor whose title had been based on appropriation. It would be contradictory or nonsensical to assume a “legitimate” beginning. The factual state of affairs became a legitimate one by its acknowledgment by other people. Lawfulness consists in the general acceptance of the rule that no further arbitrary appropriations or violent expropriations shall be tolerated.#
• If one put together everything that various Nazis have stigmatized as Jewish, one would get the impression that our whole civilization has been the achievement only of Jews.#
• The demands for liberty and self-determination on the part of the Asiatic peoples are a result of their Westernization. The natives are fighting the Europeans with ideologies borrowed from them.#

Ludwig Von Mises, Human Action (1949)

• A slight although continuous pressure on the gross market rate of interest as originating from a continuous increase in the quantity of gold, and also from a slight increase in the quantity of fiduciary media, which is not overdone and intensified by purposeful easy money policy, can be counterpoised by the forces of readjustment and accommodation inherent in the market economy. The adaptability of business not purposefully sabotaged by forces extraneous to the market is powerful enough to offset the effects which such slight disturbances of the loan market can possibly bring about.#

Ludwig Von Mises, The Theory of Money and Credit (1953)

• The development of the clearing system and of fiduciary media has at least kept pace with the potential increase of the demand for money brought about by the extension of the money economy, so that the tremendous increase in the exchange value of money, which otherwise would have occurred as a consequence of the extension of the use of money, has been completely avoided.#Quoted in Lawrence White, The Theory of Monetary Institutions (1999)

Ludwig Von Mises, The Ultimate Foundation of Economic Science (1962)

• What distinguishes the descriptions of history from those of the natural sciences is that they are not interpreted in the light of the category of regularity.#
• Historical experience is not laboratory experience. It is experience of complex phenomena, of the outcome of the joint operation of various forces.#

Luis Lugo, “Caesar’s Coin Revisited (comments on Man, Society, and the State)” (1996)

• The Vatican in its social thinking throughout most of the modern period did not sufficiently understand the varieties of liberalism with which it was dealing. Being based on the continent, it saw a more militantly secular type of liberalism with a whole metaphysics it correctly found to be offensive, and it did not appreciate until the late nineteenth and early twentieth century how the Enlightenment project had been moderated significantly in the Anglo-American tradition by pre-existing Christian sources.#

Michael Bordo, “Monetary Policy Regimes and Economic Performance” (1999)

• The Fisher effect – the correlation between nominal interest rates and expected inflation – is hard to detect before 1914 because inflation was a white noise process whereas, later in the twentieth century, when inflation became more persistent, it became more apparent#
• By limiting the lender of last resort to rediscounting only such paper as arose from “actual commercial transactions” as opposed to paper arising from “speculative transactions” (i.e., loans backed by stock market collateral), the Federal Reserve Act sustained the real bills doctrine but, in so doing, it confused the elasticity of one component of the money stock relative to another and the elasticity of the total.#
• The cooperation that did occur [during the classical gold standard] was episodic, ad hoc, and not an integral part of the operation of the gold standard. Of greater importance is that, during periods of financial crisis, private capital flows aided the Bank. Such stabilizing capital movements likely reflected market participants’ belief in the credibility of England’s commitment to convertibility.#
• Adjustment to balance of payments disturbances was greatly facilitated by short-term capital flows. Capital would quickly flow between countries to iron out interest rate differences. By the end of the nineteenth century the world capital market was so efficient that capital flows largely replaced gold flows in effecting adjustment.#

Michael Mann, “The Autonomous Power of the State: Its Origins, Mechanisms, and Results” (1984)

• We can estimate that in Near Eastern imperial societies up to Alexander the Great the maximum unsupported march possible for an army was about 60-75 miles. Alexander and the Romans may have extended it to nearly 100 miles, and this remained the maximum until the eighteenth century in Europe when a massive rise in agricultural productivity provided the logistical basis for far wider operations. Before then further distances required more than one campaigning phase, or—far more common if some degree of political control was sought—it required elaborate negotiations with local allies regarding supplies.#
• A co-ordinated administrative division between infantry, cavalry, and artillery, usually organized by the state, would normally defeat forces in which these activities were mixed up—at least in ‘high intensity’ warfare.#
• The laws of the feudal states in Europe were reinforced by rules descending from Roman law (especially property law), Christian codes of conduct, and Germanic notions of loyalty and honour.#

Milton Friedman, A Monetary History of the United States, 1867-1960 (1963)

• The distinction [between demand deposits and time deposits] became of major importance to banks (and so reliable data became available on a continuous basis for the two categories separately) only after 1914, when the Federal Reserve Act introduced differential requirements for demand and time deposits.#
• Though national bank notes were nominally liabilities of the banks that issued them, in effect they were indirect liabilities of the federal government thanks to both the required government bond security and the conditions for their redemption.#
• The sharp rise in the stock of money from 1868 to 1872 was primarily a consequence of the spread of deposit banking#
• Silver agitation had its major economic impact through this effect on expectations rather than through the direct contribution that silver purchases made to the expansion of the money stock.#
• Until the establishment of federal deposit insurance in 1934, there was no more sensitive indicator of the state of public confidence in the banks than the deposit-currency ratio.#
• The Federal Reserve System therefore began operations with no effective legislative criterion for determining the total stock of money.#
• In retrospect, it probably would have been better either to have permitted the gold-standard rules to operate fully, once something like an international gold standard was adopted, or to have replaced them completely by an alternative criterion. The compromise of disregarding minor movements but reacting to major ones may have promoted stability during the twenties but, if so, only at the cost of great instability at either end of the decade. The result was that the policy, as carried out, achieved neither the internal objective of domestic stability nor· the external objective of a stable international gold standard.#
• The difficulties giving rise to financial panics in earlier periods resulted much less from the absence of elasticity in the total stock of money than from the absence of interconvertibility of deposits and currency.#
• The impairment in the market value of assets held by banks [during the Great Depression], particularly in their bond portfolios, was the most important source of impairment of capital leading to bank suspensions, rather than the default of specific loans or of specific bond issues.#
• Because there was an active market for bonds and continuous quotation of their prices, a bank’s capital was more likely to be impaired, in the judgment of bank examiners, when it held bonds that were expected to be and were honored in full when due than when it held bonds for which there was no good market and few quotations. So long as the latter did not come due, they were likely to be carried on the books at face value; only actual defaults or postponements of payment would reduce the examiners’ evaluation. Paradoxically, therefore, assets regarded by the banks as particularly liquid and as providing them with a secondary reserve turned out to offer the most serious threat to their solvency.#
• The use of the gold-exchange standard did mean, however, that there was less leeway in the adjustments among countries—the rough equilibrium could not be quite so rough as under the full gold standard. The gold-exchange standard rendered the international financial system more vulnerable to disturbances for the same reason that the rise in the deposit-reserve ratio rendered the domestic monetary system more vulnerable: because it raised the ratio of claims on the relevant high-powered money—in this case, ultimately, gold—to the amount of high-powered money available to meet those claims. #
• Perhaps the best description of the role of gold in the United States since 1934 is that, rather than being the basis of the monetary system, it is a commodity whose price is officially supported in the same way as the price of wheat, for example, has been under various agricultural programs. The major differences are that the support price for agricultural products is paid only to domestic producers, the gold-support price to foreign as well as domestic; the agricultural products accumulated are freely sold at the support prices to anyone, the gold only to certain foreign purchasers and not to any domestic ones. In consequence, the gold program has set a floor under the world price of gold in terms of dollars.#
• it takes some seven months for banks to adjust to an unanticipated discrepancy between their actual and desired reserve positions produced by a change in their actual position, and some three years for banks to carry through a thoroughgoing revision of their actual reserve position as a result of a change in the desired position. #
• It seems likely that any direct effect of price control [on the velocity of money] was less important than the unavailability to consumers of automobiles and other consumer durable goods, after wartime cessation of their production in 1942, and than the restrictions imposed on construction and on private capital formation. Both consumers and business enterprises were prevented from using their funds to purchase kinds of goods they regard as increasing their wealth, which ordinarily absorb a large fraction of increases in income and an especially large fraction of transitory increases. The blocking of these channels of spending induced consumers and business enterprises to increase the stock of other assets—in particular, as it turned out, money and government securities—to a much higher level than otherwise, relative to income. #
• The difference [in government finance between the two World Wars] was largely formal. Perhaps half the World War I increase in loans to customers was secured by government obligations; in World War II, the banks purchased the securities directly.#
• The tax on money balances implicit in inflationary money creation was a much more productive tax in World War II than in World War I, because of the lower velocity prevailing during World War II than during World War I (Table 24, line 3). Money balances averaged 45 per cent of one year’s national income in 1914-20, 69 per cent in 1939-48. A 1 per cent tax on money balances—if we ignore the reflex influence of the tax on the amount of money balances held—therefore yielded 0.45 per cent of a year’s national income in World War I, 0.69 per cent, or about 1 times as much, in World War II.#
• Before 1914 a rise in interest rates could raise the stock of money only through a rise in the deposit-reserve ratio or through the attraction of capital and thereby gold from abroad. After 1914, a rise in interest rates could also raise the stock of money by inducing banks to borrow more heavily from the Federal Reserve System.#

Paul Johnson, Modern Times (1991)

• Poland was the awkward piece on the global chessboard, a reminder that the war had not been so much a conflict between right and wrong as a struggle for survival.#
• Lenin’s Bolsheviks of 1917, Mao’s CCP cadres of 1949 and the Congressmen of India came to power by different routes. But they had this in common. All three new ruling groups were men who had never engaged in any other occupation except politics and had devoted their lives to the exploitation of a flexible concept called ‘democracy’.#
• Nineteenth-century colonialism reflected the huge upsurge in European numbers. Twentieth-century decolonization reflected European demographic stability and the violent expansion of native populations.#

Paul Samuelson, “Parable and Realism in Capital Theory: The Surrogate Production Function” (1962)

• Solow, in the interest of empirical measurements and approximation, has been willing occasionally to drop his rigorous insistence upon a complex-heterogeneous- capital programming model; instead, by heroic abstraction, he has carried forward the seminal work of Paul H. Douglas on estimating a single production function for society and has had a tremendous influence on analysts of statistical trends in the important macro aggregates of our economy. One might almost say that there are two Solows – the orthodox priest of the MIT school and the busman on a holiday who operates brilliantly and without inhibitions in the rough-and-ready realm of empirical heuristics.#

Perry Mehrling, “What Is Monetary Economics About?” (2000)

• Even though in principle the gold standard central banker stood ready to buy and sell gold at a fixed price, swelling or depleting his gold reserve depending on the balance of demand and supply, in practice he operated by manipulating the discount rate in order to obviate the need for substantial gold flows.#

Richard Timberlake, “The Significance of Unaccounted Currencies” (1981)

• If [unaccounted currencies] were more than trivial in quantitative terms, it would help to explain the decline in the measured velocity of money during the nineteenth century. For if the stock of accounted money were supplemented by an unperceived quantum of unaccounted money, measured velocity – money income divided by the stock of accounted money – would be higher than the true velocity of money. As unaccounted money gradually was replaced by accounted money, the measured velocity of circulation would fall.#
• The general and rapid rise in prices in 1862 due to the first issue of greenbacks during the Civil War was perhaps the most acute example of government-inspired paper money inflation and suspension [in the pre-Fed U.S.]. Commodity values of most metallic coins rose sharply above their monetary values, and coins then went out of circulation, leaving the North’s economy with almost no currency denominations below $5. . . . After 1865, private coinage as well as issues of state bank notes were effectively prohibited. But government coinage of fractional currency was still inadequate until after 1880.#

Steven Solnick, Stealing the State (1998)

• In effect, Soviet institutions were victimized by the organizational equivalent of a colossal “bank run” in which local officials rushed to claim their assets before the bureaucratic doors shut for good. As in a bank run, the loss of confidence in the institutions makes its demise a self-fulfilling prophecy.#Quoted in Doug North, Understanding the Process of Economic Change (2005)

Thomas Sowell, Knowledge and Decisions (1980)

• By definition, the initial insurgents began under a different set of incentives from those which they seek to create. Once they achieve their goal, the new incentive structure tends to attract and select successors with different characteristics, as well as perhaps modifying the characteristics of some of the original insurgents. . . . People who chose to be Christians under the persecution of the Roman Empire were not the same as people who chose to be Christians after Christianity had become the state religion.#

Tom Palmer, “The Hermeneutical View of Freedom” (1990)

• The process of civilization is, to a very large extent, precisely one of learning to ‘demand’ new things for which previous generations had no demand.#

Yuval Harari, Sapiens (2014)

• The first texts of history contain no philosophical insights, no poetry, legends, laws, or even royal triumphs. They are humdrum economic documents, recording the payment of taxes, the accumulation of debts and the ownership of property.#
• Since 1945, no independent country recognised by the UN has been conquered and wiped off the map. Limited international wars still occur from time to time, and millions still die in wars, but wars are no longer the norm.#
• Up until the nineteenth century, the vast majority of military revolutions were the product of organisational rather than technological changes.#
• To colour all empires black and to disavow all imperial legacies is to reject most of human culture. Imperial elites used the profits of conquest to finance not only armies and forts but also philosophy, art, justice and charity. A significant proportion of humanity’s cultural achievements owe their existence to the exploitation of conquered populations. The profits and prosperity brought by Roman imperialism provided Cicero, Seneca and St Augustine with the leisure and wherewithal to think and write; the Taj Mahal could not have been built without the wealth accumulated by Mughal exploitation of their Indian subjects; and the Habsburg Empire’s profits from its rule over its Slavic, Hungarian and Romanian speaking provinces paid Haydn’s salaries and Mozart’s commissions.#
• History’s first known money – Sumerian barley money – appeared in Sumer around 3000 BC, at the same time and place, and under the same circumstances, in which writing appeared. Just as writing developed to answer the needs of intensifying administrative activities, so barley money developed to answer the needs of intensifying economic activities.#