![]() ![]() “Then the cycle began again under the Qing Dynasty. Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail Wealth became promises to deliver money-what I call “financial wealth.” Rules for lending changed and new types of money were made: cash deposits, bonds, and stocks that looked pretty much like we know them today. The alchemy of lending as we know it today was first created in Italy around 1350. ![]() It was an effective incentive-based system for getting rich. ![]() The explorers and those who backed them split the profits. That’s how the greatest fortunes were built at the time. A century or so later, in the Age of Exploration, explorers went around the world collecting gold and silver and other hard assets to make more money. ![]() As a result of this lack of lending, currency was “hard” (gold and silver). “Up until around 1350, lending with an interest rate was prohibited by both Christianity and Islam-and in Judaism it was banned within the Jewish community-because of the terrible problems it caused, with human nature leading people to borrow more than they could pay back, which created tensions and often violence between borrowers and lenders. ![]()
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