Debt: The First 5000 Years - autonomous learning

AGE OF THE GREAT CAPITALIST EMPIRES 313
they were regularly reduced to melting down the family silver to pay
their taxes.
This was because taxes had to be paid in metal. Everyday business
in contrast continued to be transacted much as it had in the Middle
Ages, by means of various forms of virtual credit money: tallies, promissory
notes, or, within smaller communities, simply by keeping track
of who owed what to whom. What really caused the inflation is that
those who ended up in control of the bullion-governments, bankers,
large-scale merchants-were able to use that control to begin changing
the rules, first by insisting that gold and silver were money, and
second by introducing new forms of credit-money for their own use
while slowly undermining and destroying the local systems of trust that
had allowed small-scale communities across Europe to operate largely
without the use of metal currency.
This was a political battle, even if it was also a conceptual argument
about the nature of money. The new regime of bullion money
could only be imposed through almost unparalleled violence-not only
overseas, but at home as well. In much of Europe, the first reaction to
the "price revolution" and accompanying enclosures of common lands
was not very different from what had so recently happened in China:
thousands of one-time peasants fleeing or being forced out of their villages
to become vagabonds or "masterless men," a process that culminated
in popular insurrections. The reaction of European governments,
however, was entirely different. The rebellions were crushed, and this
time, no subsequent concessions were forthcoming. Vagabonds were
rounded up, exported to the colonies as indentured laborers, and drafted
into colonial armies and navies-or, eventually, set to work in
factories at home.
Almost all of this was carried out through a manipulation of debt.
As a result, the very nature of debt, too, became once again one of the
principal bones of contention.
Part 1:
Greed, Terror, Indignation, Debt
No doubt scholars will never stop arguing about the reasons for the
great "price revolution"-largely because it's not clear what kind of
tools can be applied. Can we really use the methods of modern economics,
which were designed to understand how contemporary economic