Published on March 9, 2014
“ Man Bites Man! Urukagina Economics? “the rich must use silver when purchasing from the poor” Code of Urukagina c. 2380 BCE "If a man knocks out the eye of another man, he shall weigh out one-half a mina of silver." Code of Ur-Nammu, c. 2100 BCE “... you shall value it according to the amount of seed-corn it can carry, at the rate of fifty shekels of silver for a homer of barley seed. If he values it from the year of jubilee ...” Leviticus 27:16-21, c. 500 BCE "I will trade you this gold ring for that chicken" – as spoken by diasporas’ victims, in all epochs “hearken and beware: hold firm to your bond! What you are, you are only by contracts: limited and well defined” – Richard Wagner’s, Fasolt, Das Rheingold Act 2 “Those, who make the four elements the cause of all which is, are greatly led away by their own arguments. The causes of many happenings belong elsewhere.” – Jean Fernel, Dialog, 1541 Economic theory seems to dismiss the earliest history of informal money we invoke for resolving our trades. This has misled discussion for more than two centuries. It is small wonder the challenge of Prof. Ottmar Issing in March 2011 remains, “a Nobel for anyone who provides a proper theoretical treatment that combines credit and money, financial quantities and financial prices” speaking from within this blind ignoring informal money is not proper basis. We must examine what is excluded. We live in a ‘pragmatic’ world built on informal money and credit. John Nash famously modelled the mathematics of reaching trade agreement for game theory application in economics. He was awarded 1994 Nobel Prize. His model1 started from admitting for any kind of money ‘magic’, pragmatic or formal. Nash equilibrium model of trading between ‘Bill’ and ‘Jack’ seems closer to factual circumstance we are all familiar with. Jack makes his trade for what he values as less than what he determines is better value in what Bill offers in trade, in-kind. We all understand that motivation, intending better for ourselves through trade. Conventional economic theory becomes abstruse, using conjecture to support projections as fact. Dismissal of such pragmatic origins, as Menger2 does in one short sentence, exposing bias by dismissing spice and shells with all informal market media of exchange not worth understanding, he maintains metal based specie is worthy alone. For Mengerians ever since formal money is discussed, somehow informal money is not worthy, not ‘peculiarly’ suited as metal based specie. Nevertheless it is clear that the choice of the precious metals by law and convention, even if made in consequence of their peculiar adaptability for monetary purposes, presupposes the pragmatic origin of money, and selection of those metals, and that presupposition is unhistorical. Markets make do with what is ready to their purpose, pragmatic money. Clearly Menger knew of the many commodities put to pragmatic purpose by trade but did consciously chose excluding these or any informal money in discussion or theory, though he admits this is unhistorical. Metal 1 2 "The Bargaining Problem", John F. Nash, Econometrica (18): 155–62, 1950 “On the Origins of Money”, Carl Menger, Economic Journal, volume 2,(1892) p. 239-55, translated by C.A. Foley Page 1 of 6 November 2012 © Copyright StockTakers Limited, All Rights Reserved. Copying Prohibited. The author does not provide investment advice. In order to use reproduce or convey the material herein, in any way, written agreement must be obtained from the author or its agent Architypes Inc. StockTakers Limited is an Alberta corporation providing information on “likeables” equities. StockTakers Limited encourages your seeking tax law advisor for capital gains tax dispositions.
“ Man Bites Man! Urukagina Economics? in standardized weights were known (likely due practical size of ingots cast from crucibles scaled to fit manageable fires as craft smelting developed) such as pre-800 BC Greek iron oboli, metals in a uncoined state serving as the medium of exchange, and even certain other commodities, cattle, skins, cubes of tea, slabs of salt, cowrie-shells, etc.; still we are confronted by this phenomenon, still we have to explain why it is that the economic man is ready to accept a certain kind of commodity, even if he does not need it, Collaboration and cohesion depend on agreement among the participants that the parts of operation can effect and realize the action being promoted by their efforts, whether that is in getting our mastodon, bison or trade done for dinner. We use what is at hand, inventing what is needed to enable the process that our self-interest can be served. If one does not need it why does one accept it trade? We know someone who can accept it in trade, maybe in a better deal. Because we behave socially, acting in cohesion, just as we today use informal money in all its originations in trade, from repurchase bonds to re-insurance, or in off-balance sheet trades. That is most important to real economies participants still today in their effort to avoid the premium rate at lender of last resort, such as LIBOR sets. We expect that setting is altruist, fair to all though the selfish may conspire so we react accordingly with outrage at those Artful Dodgers. Markets invoked such ready ‘pragmatic’ mediums to exchange as informal money, long before coin and paper specie, accordingly showing the standard history and meaning of money short, merely 'theoretical' led away by their own arguments, as Jean Fernel3 might have censured. Liquidity is the virtue sought by market participants. Enabling conversion from one utility to another is the form of trade, it is conversing in liquidity. A value dense commodity metal gives market advantage over bulky commodities subject to spoil. This advantage the Code of Urukagina recognized could benefit the poor, converting surplus perishables to more durable and readily exchanged medium, capable of paying forward, commuting the value. Surely as Wittgenstein argued one cannot speak as factual that which one does not know. However as shown by fragmentary archaeological facts known over two centuries ago, current with debate of gold standard banking regime and emergent corporate invocation. More importantly this short-changed and misdirected ‘story’ needs airing to understand the preference, making coin as a priori money. Market participants had long determined otherwise and still continue using the credit alternative to formal money specie within and without economic speculation is fact. Menger’s contrary exclusion prefaces discussion still today4, as the basis of a truncated history we all receive. Mengerians made ‘stick’ the town as the consequence of coin leading to specialised producers, as town-barter-money-credit paradigm. Truly that is entirely in the face of denying our biblical ethos and archaeological facts. Cuneiform wrote a credit system. 3 Nobel in Physics 1932 prize winner Sir Charles Sherrington reviews Fernel in his, “Man on Nature”, Gifford Lectures, 1937. ”On the origin of specie: Theories on where money comes from say something about where the dollar and euro will go”, Free exchange, The Economist, http://www.economist.com/node/21560554 It makes interesting errors in drawing from history, as editorial board reviewed copy that would appear to be based in conventional received wisdom. 4 Page 2 of 6 November 2012 © Copyright StockTakers Limited, All Rights Reserved. Copying Prohibited. The author does not provide investment advice. In order to use reproduce or convey the material herein, in any way, written agreement must be obtained from the author or its agent Architypes Inc. StockTakers Limited is an Alberta corporation providing information on “likeables” equities. StockTakers Limited encourages your seeking tax law advisor for capital gains tax dispositions.
“ Man Bites Man! Urukagina Economics? Urukagina was made king by popular consent following his leading popular revolt against cruel exploitation by the palace. Possibly the earliest case of some form of democracy, but the neighbouring palace tyrants brought a violent end in plunder. Further palace and plunder tumult of self-anointed kings at war ensued ultimately leading to Sargon II the Akkadian creating the first known Sumerian empire spread over the Middle East. Of course this story is familiar to us as the biblical time when tired of these conflicts the Semite Abram and family left neighbouring city of Ur of the Chaldees seeking a peace promised in Palestine. The Code of Urukagina was written 2380 BC near two millennia before the invention of coinage by the Greek palace economies of plunder. This code’s fragmentary surviving evidence documents the then already current use of silver as medium of exchange put to advantage in trade. Presaging Athens Pericles by two millennia Urukagina came to power in Lagash as the leader of a peasants' revolt against palace tyrants. He promulgated so many reforms in the interest of the oppressed common people that he has been called the first social reformer in history. He “cleared and cancelled obligations for those indentured families, citizens of Lagash living as debtors because of grain taxes, barley payments, theft or murder.” He saw silver useful medium for trade ensuring silver remained available in circulation and securing its advantage to the poor producer. Neighbouring states combined under Lugal, of Umma to end both Urukagina and institution of laws not in tyrants’ favour. His demise at Lugal’s hands became a peoples lament recorded in surviving praise poetry. Certainly freebooting could have been Lugal’s intent in plundering Lagash. Such continued as he was then quickly dispatched by his ally Sargon II of Akkad intent on building the earliest known Sumerian empire. Abram with his father and family left Ur to find some promised peace for them in Palestine where he had previously saved his nephew Lot in these palace wars. This article-caption involves transactions that did not involve coinage or formal money. There is no doubt these captions are all citing rules established by legal code to govern market transactions. Written laws on credit and trade were important convention for social peace that personal energies can thrive to benefit. There is present our inherent need for enforceable social convention that disputes are resolved avoiding potential for needless violence. Rule of law was always seen as socially important (though the market for eye-loss is admittedly perverse, even in the context of modern organ transplant versus donation) though cruel consequences may have suited offences in rough times, good rhetoric might avoid such penalty. Doubtlessly market trading was a mark of urbanization, but not causal. Trade came as a new distinction for the success of our species beyond having collaborated and cohesively acted to obtain bison or mastodon for our mutually successful dinners. The archaeological fact finding Page 3 of 6 November 2012 © Copyright StockTakers Limited, All Rights Reserved. Copying Prohibited. The author does not provide investment advice. In order to use reproduce or convey the material herein, in any way, written agreement must be obtained from the author or its agent Architypes Inc. StockTakers Limited is an Alberta corporation providing information on “likeables” equities. StockTakers Limited encourages your seeking tax law advisor for capital gains tax dispositions.
“ Man Bites Man! Urukagina Economics? transiting some 8,000 years earlier in Late Neolithic eras as with Göbekli Tepe excavation in Kurdish Turkey, ongoing yet for years. But we must note it is urban activity long preceding the Chalcolithic era from which we have much to comprehend by not excluding as Menger. Such excavations confirm discovery of metals extraction establishing the Chalcolithic age did not directly lead to specie, invented nearly 3,000 years later than even Ice-man Ӧtzi. Metals were used as beads, craft commodity among many in trade whose value was first for ostentation in creating cult art or jewellery much as shells were used for beadwork and became pragmatic commodity money found in use for some 30,000 years. Metals provided high density value in comparison to less stable bulky potentially ‘stale-dated’ goods. Trade in kind was the usual pragmatic vehicle for collecting taxes into Roman and medieval rulers or diocese, while metals retained their value for long periods, if not indefinitely, given propensity for adulteration to debase value as ruler’s mints became ever more practised. Metals’ market value as beads extend from their attraction as means to creating distinctive personal decoration as fashion statements such as this 2600 BC headdress of Puabi of Ur worn to confirm social status of her wealth and position. Copper was found useful much later in creating status axes and knives, but silver and gold as commodities found derived from smelting copper bearing ore were all prized for use in the creation of jewellery. Practical clay pots were long in use as cooking and storage vessels and then for smelting. Antler, bone and ivory were useful for tools but more so for cult(ural) sign and figurines. Lapis lazuli, carnelian, nephrite jade and turquoise all found in burial goods had become high-valued trade commodities as soon as incorporated into jewellery. Until a gemstone could be cut for faceting and polished it had little commodity value, indistinguishable from common quartzites readily and widely found in so many colours. Marbles and alabasters were ready material more easily worked than basalt and granites for early sculpting. Amber and other resinous tree pitches and gums like Frankincense and Myrrh, were highly prized trade goods as aromatics medicinal and or useful pitch tar for securing stone points on arrow and spear shafts from Palaeolithic times. Pearls were not of early practical use except as lustrous fetish object until means for ostentatious display when securely clasped by metals or until wire drilling later evolved to safely allow their being strung to adorn little black dresses, or dissolved in champagne at parties, as Veblen alludes some will do. Art has always been the focus of high value-added production, as artists, poets, craftsmen, movie producers, auction houses and art galleries bring to market still today. Demand for art remains flexible compared to our need for food and shelter. The materials for art manufacture have always been in demand beyond our animal necessity. It is their intellectual and social role compelling their price. These artistic outputs are Giffen Goods typically fashion driven which is all ethos. However as means to substitute value of in-kind trade product for taxation the minting of coin and a formal rate of exchange became a useful device written into law, as price and wage Page 4 of 6 November 2012 © Copyright StockTakers Limited, All Rights Reserved. Copying Prohibited. The author does not provide investment advice. In order to use reproduce or convey the material herein, in any way, written agreement must be obtained from the author or its agent Architypes Inc. StockTakers Limited is an Alberta corporation providing information on “likeables” equities. StockTakers Limited encourages your seeking tax law advisor for capital gains tax dispositions.
“ Man Bites Man! Urukagina Economics? control regimes are benefit to receiver of taxes, less the trader and far less the producer. Small wonder medieval market traders invoked their own pieds-de-poudre courts of their peers so trade dispute were not ill-understood and misconstrued by self-service of baron court and bishop curia lawyers. Bankers were often burned as traitor, usurer or heretic and their estates confiscated and apportioned as spoil conveniently suiting the victors. Chaucer assures us bishops’ artful use of vif-gage contracts on tithe coin hoard had made many lands forfeit of debtor kings and barons. The irony of gold standard advocacy coming out of the confus(ed)ing monetarist right is its failure to grasp distinct feature of gold and silver specie has been its use to frustrate market functioning freely and fairly for benefit to market users. These economists have indulged in political capital from a mislead history. Precious metal specie absorbs value created in markets sequestering those absorbed values out of trade, by that small degree if not larger, aberrating market fundamentals. Gold might only buy a chicken some days but as specie is here to stay. The Carl Menger context of money found spoon-fed to the young is a pudding of dis-informed economic theory-history. It is false premise,”the monetisation of an economy starts when agricultural communities move away from subsistence farming and start to specialise.5” Special art skills were first, long before farming. The record found in archeology prior and concurrent with Menger’s writing tells that very different story, one glossed over, as economists continue to date. The Economist editorial board piece repeats blithely, “portable, durable (fruit and vegetables are out) and divisible into smaller pieces is needed. Menger called this property “saleableness”. Spices and shells are highly saleable, explaining their use as money. Government plays no role here. The origin of money is a market-led response to barter costs, in which the best money is that which minimises the costs of trade.” Monetisation begins in "ustensiles monnais" social exchange in trade goods for making art and jewellery long before agriculture or towns evolved, as we have long been aware. Informal ‘shell’ money had long preceded formal state issued specie by some 30,000 years and continued in use even decades past Menger as just one type. More interesting is the later role of writing private ‘script’ money such as the cuneiform and papyri, preceding coinage in a history extending to derivatives and repurchase agreements as media of exchange today. Markets never created metal specie but were happy to use metal specie, especially when armed government regimes imposed their minted coin by law, to ensure extracting ‘sales’ taxation for their weal by burdening trade of the real economy, as, “governments impose taxes payable only in money, creating a demand for money that means it will be widely accepted as payment for goods. The state forces the economy away from barter” as claimed is just “specious” consequence of Cartalist formal money the state requires. Their article is concerned with whether American dollars are suspect as reserve currency by either an inflation vulnerable Yuan or an improper backed Euro. Markets have always made credit alternative to barter constraints. The answer is the market will move where it finds most utile currency for gaining its desired trades. Risk of devalue or potential for gain varies, remaining the holder’s of any specie money in markets. 5 Ibid, Economist Page 5 of 6 November 2012 © Copyright StockTakers Limited, All Rights Reserved. Copying Prohibited. The author does not provide investment advice. In order to use reproduce or convey the material herein, in any way, written agreement must be obtained from the author or its agent Architypes Inc. StockTakers Limited is an Alberta corporation providing information on “likeables” equities. StockTakers Limited encourages your seeking tax law advisor for capital gains tax dispositions.
“ Man Bites Man! Urukagina Economics? In Say's view, a rational businessman will never hoard money, "for the value of money is also perishable." He rightly avers in favour of liquidity, so long as there is no shortage of profitable means to invest capital. Consumer demand drives all economies. Inherently the work of the entrepreneurs trading money is as means to benefit from trading. The faster one can move trades to build equity then the increase in medium is obtained from one market trade (where utility is discounted, by ‘Jack’) to another where the item is not discounted but inflated by varying demand (of ‘Bill’ to use Nash’s model participants by name). The markets will factor inflation where known, or gain by currency suiting the locale in which transaction needs to be made. Liquidity is sought by market traders. Enabling conversion from one utility to another is the form of conversing in liquidity for gain. The attempt to ring-fence value through implications of a gold standard, diminishes liquidity, freezes the utility embedded in trade decisions, defies normal market conditions by imposing friction on markets. The gold standard applies tax burden on individuals advancement of their interests in the market. If you have no use for ‘dead money’ parked on balance sheets, “distribute it to your shareholders.” Shareholder’s will allocate that cash where the economy can use it, is subtext of central bank governor Mark Carney’s urging, even in art ”Sotheby's Scores Its Biggest Night Ever” but gold, not so much. Market tested proof positive shows in our ABC’s Truth or Dare portfolio results. We do know more and better as shown by our continuing record for advantageous outrageous results obtained in volatile real markets. Our methods from only balance sheet analysis obtain high return, capital security and liquidity for your investment portfolios. That is very likeable. Our reasons for having any equity in our portfolios are clear, concise and consistent. The equities we hold are “likeables” tending to gain 67% of the time. We do not make stock prices but can reasonably respond to stock price tendencies, by our knowing the price of risk, the downside, and buying and holding accordingly. That is new fundamentals from theory we have put into policy obtaining 29% IRR average. Know What You Have. Have What You Know Our view is risk averse. Of course we require a fee for doing that. Mail us for our help. Ernst and Hans Goetze, Architypes Inc and StockTakers Limited Head Office 76 Midridge Close SE Calgary, AB T2X 1G1 Page 6 of 6 72 Cornwall Street Toronto, ON M5A 4K5 351 Chemin Boulanger Sutton, PQ J0E 2K0 450 538-1270 November 2012 © Copyright StockTakers Limited, All Rights Reserved. Copying Prohibited. The author does not provide investment advice. In order to use reproduce or convey the material herein, in any way, written agreement must be obtained from the author or its agent Architypes Inc. StockTakers Limited is an Alberta corporation providing information on “likeables” equities. StockTakers Limited encourages your seeking tax law advisor for capital gains tax dispositions.
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