David Hume did not assume full employment.

Inflation and Disinflation in Turkey, edited by Faruk Selcuk, Libby Rittenberg, Aykut Kibritcioglu:

O'Brien (1975) argues that there are some differences between transmission mechanisms in classical and neoclassical versions of QTM. The neoclassical model is based on the assumption of full employment, and is characterized by a dichotomy between the real and monetary sectors. Real wages will be determined in the real sector (labor market) while nominal prices are a function of the money supply. Therefore, increases in the money supply increase the general price level by leaving the volumes of goods demanded and supplied, and hence, real output unchanged. 

On the other hand, O'Brien writes, some classical economists like David Hume do not assume full employment and there is no room for a dichotomy. According to Hume, an increase in the money supply does not increase the general price level through a different transmission mechanism. The increase in nominal cash balances of economic units initially results in higher expenditures for goods, and hence, in higher production. Then, under the assumption of underemployment, prices start to adjust to risen money supply. As a result, money is not neutral as in the neoclassical model; it has also some real effects in the short run.

 
David Hume did not assume full employment. 

Milton Friedman did. Friedman in The Counter-Revolution in Monetary Theory, page 8:

If the government gets the funds by borrowing from the public, then those people who lend the funds to the government have less to spend or to lend to others.

Those who lend to government have less to lend to others.

Q: At what time in history (since Charlemagne, say) would lending to others have reached its "full employment" stage?

A: It would have to be the time that Keynes referred to in Chapter 23 as "the greatest age of the inducement to investment" and in Chapter 21 as "a period of almost one hundred and fifty years" when "rates of interest were modest enough to encourage a rate of investment " that was "consistent with an average of employment which was not intolerably low."

"[N]othing short of the exuberance of the greatest age of the inducement to investment could have made it possible to lose sight of the theoretical possibility of its insufficiency."

-- J.M. Keynes

At such a time, it would have seemed that "full employment" had been achieved.

When, exactly? I'd say from the publication of The Wealth of Nations to the First World War: the 138 years from 1776 to 1914.

During that time, it seemed reasonable and natural to think full employment had been achieved. Investment was viewed with an optimism that now seems unnatural. It seemed self-evident that "supply creates its own demand". And economists lost sight of the theoretical possibility that investment could be insufficient.

However, economists this side of the first World War have no such ready justification for assuming full employment.

If you think of civilization as a massive business cycle some 2000 years in length, the 150 years of the "greatest age" make a nice high point. This coincidentally puts Charlemagne just at the bottom, where he was busy starting the upswing of the cycle.

This is why the economy changes: It is part of a massive cyclical phenomenon. Economic forces change and sometimes fade; and other driving forces (religious, political,  military, and irrational) may also each have a dominant phase. But the cycle is a handy framework for thinking about the economy.

And if you think of economic forces as among the forces that drive the cycle, you can see why David Hume (1711-1776) did not assume full employment, and perhaps why J.B. Say, just a little later, did.

It also becomes obvious that Milton Friedman shouldn't have. Nor should we.

The custom of paying in money

From 2014, I found this just now in my test & development area. It's not a final draft, but it's time to blog it!

//

 Adam Smith, at EconLib:

The revenues of the ancient Saxon kings of England are said to have been paid, not in money but in kind, that is, in victuals and provisions of all sorts. William the Conqueror introduced the custom of paying them in money.⁷² This money, however, was, for a long time, received at the exchequer, by weight and not by tale.⁷³

That quote struck me when I read the paperback Wealth of Nations years back. At Econlib, however, footnote 72 disputes Smith's claim that William the Conqueror started paying the help in cash:

['King William the First, for the better pay of his warriors caused the firmes which till his time had for the most part been answered in victuals, to be converted in pecuniam numeratam.'—Lowndes, Report containing an Essay for the Amendment of the Silver Coins, 1695, p. 4. Hume, whom Adam Smith often follows, makes no such absurd statement, History, ed. of 1773, vol. i., pp. 225, 226.]

Absurd, then. I was a little disappointed to read that, as I've held on to that quote since the 1980s (or since whenever I first read The Wealth of Nations). But I went looking for Hume, History, volume i, pages 225-226, and I made out pretty well.

At Liberty Fund, volume 1 of David Hume's The History of England, [1778]. Nothing to quote, really, for Hume does not say "William did not pay his people in money" and Hume does not say "Smith is a jerk for saying such things". Nothing specific that's relevant. I would point out, though, that The Wealth of Nations was published two years before Hume's 1778 volume, so maybe Smith was unlikely to "follow Hume" in this particular case.

At the Liberty Fund link, the page numbers are embedded in the text!! (In case you were wondering how I found pages 225 and 6.) Just search for the page number in square brackets: [225] for example, or [226]. I don't know for a fact that Liberty Fund and the EconLib footnote refer to the same edition of Hume's work with the same page numbering, but in this case it seems a fair guess.

http://oll.libertyfund.org/titles/hume-the-history-of-england-vol-1

So, okay, well... What does Hume have to say on the subject? I searched for coin. I found coincide a couple times, and coined. The fifth hit was a relevant one. Page [278]:

It is said, i that this prince, from indulgence to his tenants, changed the rents of his demesnes, which were formerly paid in kind, into money, which was more easily remitted to the Exchequer. But the great scarcity of coin would render that commutation difficult to be executed, while at the same time provisions could not be sent to a distant quarter of the kingdom. This affords a probable reason, why the ancient kings of England so frequently changed their place of abode: They carried their court from one palace to another, that they might consume upon the spot the revenue of their several demesnes.

Which prince?... Henry... in the early 1100s... King Henry

In other respects, he executed justice, and that with rigour; the best maxim which a prince in that age could follow. Stealing was first made capital in this reign:c False coining, which was then a very common crime, and by which the money had been extremely debased, was severely punished by Henry.d Near fifty criminals of this kind were at one time hanged or mutilated; and though these punishments seem to have been[278] exercised in a manner somewhat arbitrary, they were grateful to the people, more attentive to present advantages, than jealous of general laws.

//I have some other note that says HENRY started paying in money
//find that old note for this post Art

This is from my son's high school history book (Welty and Greenblatt pp.587-589):

The first nation-state to develop in Western Europe was England. The story begins with the conquest of Anglo-Saxon England by William the Conqueror, Duke of Normandy, in 1066.

William imposed his own type of feudal system on England. He took away much of the land that had belonged to Anglo-Saxon nobles and gave it to his personal followers. However, he did not completely trust these nobles so the manors he gave them were widely scattered.

At the time the nobles (like the kings, I presume) had to travel from one manor to another and consume their 'taxes' in kind.

William also required that the nobles take an oath of allegiance to him. Decentralization of authority was basic to the feudal system, but the new Norman ruler wanted as much power as possible in his own hands.

William's successors continued to try to lessen the power of the nobles. Henry I (1100-1135) began to pay his officials salaries, making them more dependent upon him. He also established a royal court and a treasury that audited the accounts of the kingdom. Henry established one system of law for all his subjects. It incorporated much from both Anglo-Saxon and feudal customs and practices.

Okay. The part about William the Conqueror is for context. Henry I came later. Henry I (1100-1135) began to pay his officials salaries...

Forget the part about "making them more dependent on him". Maybe that follows, maybe it doesn't. But if it wasn't William the Conqueror -- or "William the Bastard" as he is sometimes called -- who started paying his people in coin, then it was Henry not long after William. 1100 is not that long after 1066.

So: After the Dark Age, in Charlemagne's time, 800AD, coin started coming back. And then, some 300 years later, governments started paying people in coin.

Things moved slowly in those days.

A Theory of Decline

The rise and decline of civilizations is an economic cycle, and concentration of wealth is the cause of decline:

When wealth grows faster than it concentrates, wealth spreads. You get the upswing of an economic cycle. But when wealth concentrates faster than it grows, you get the downswing.

The cause of the decline of civilizations is that "concentration" grows faster than "distribution" of wealth. Except, the word distribution is not quite right. It suggests a policy of redistribution. I mean something more on the order of natural distribution, where the act of creating wealth causes wealth to spread. I should use the word "dispersion" instead.

Distribution of wealth, dispersion, does not solve the problem if it does not arise spontaneously from the workings of the economy. You can't just tack redistribution onto the end of the process and hope to accomplish real change.


The policies that encourage wealth creation do so by creating incentives that reward wealth creators. These policies enhance the concentration of wealth, making the problem worse. Rewarding wealth creators skews the naturally-occurring distribution of wealth such that wealth concentrates at a faster rate. This puts the "dispersion of wealth" process at risk of being insufficient to sustain the long-term economic upswing. If downswing develops, you have the decline of civilization.

We can put this in terms Piketty uses. Dietrich Vollrath summarizes Piketty's view:

"Piketty says that if r>g, where r is the return to capital, and g is the growth rate of aggregate GDP, then wealth will become more and more concentrated."

Add to this the understanding that the cycle of civilization is an economic cycle driven by the dispersion and concentration of wealth, and it becomes immediately obvious that r>g puts civilization at risk.

How it looks from the "rise" side of the cycle of civilization, at or near the peak

We may therefore acquiesce in the pleasing conclusion, that every age of the world has increased, and still increases, the real wealth, the happiness, the knowledge, and perhaps the virtue, of the human race.

- Edward Gibbon, 1782

Three words that can bring civilization down

"Property is sacred"

The sacredness of property is not more rational than the divine right of kings.

The cycle of civilization is a massive business cycle driven by the concentration and dispersion of wealth. If property is sacred, there is no stopping the concentration of wealth. If you don't mind a dark age every so often, then you may be okay with "property is sacred". Otherwise, it's a no-go.

Me, I always liked Issac Asimov's picture of a civilization lasting twelve thousand years or more. But as Toynbee pointed out, in 6000 years of human civilizations, ours is the third generation. On average, a civilization lasts only about 2000 years.

By one commonly used count, this is year 2019.

My guess is that most people like the idea that property is sacred. They don't like the idea that "property is sacred" could be a driving force behind the concentration of wealth and the fall of civilization. If I'm right about that, it would explain why civilizations always collapse: We refuse to accept the idea that sacredness of property can be harmful, and we don't limit ownership.

So if a civilization is lucky enough that nothing else causes it to collapse, the concentration of wealth engendered by the principle that "property is sacred" will eventually bring that civilization to an end. One might say that sacred property is the method behind the madness in the phrase "civilizations die from suicide".


When the growth of wealth outpaces the concentration of wealth, civilization grows. When the concentration outpaces the growth of wealth, civilization declines.

The economy drives civilization

In yesterday's post I said my impression is that writing first developed as a way to keep track of business data. I wasn't happy with "my impression is", but I couldn't put my finger on anything more substantial. So, soon as I finished that one I went looking. And as soon as I went looking, I remembered lookin before.

Found it. I wrote up something back in December 2017. Found it on my "Test and Development" blog. Never quite finished it, apparently.

I updated my remarks, updated one of the Wikipedia excerpts, added some links, and formatted the post using the "two-color dialog" background style I sometimes use.

Quoted sources		My commentary

AncientScripts:
The Sumerians were one of the earliest urban societies to emerge in the world, in Southern Mesopotamia more than 5000 years ago. They developed a writing system whose wedge-shaped strokes would influence the style of scripts in the same geographical area for the next 3000 years...

The excerpt takes us back a good 5000 years to the Sumerians. Theirs was an urban society with a writing system. Yesterday, Carroll Quigley pointed out that civilizations have writing and cities, but "Neolithic Garden cultures" did not. It would appear that the Sumerians developed writing and civilization.

It is actually possible to trace the long road of the invention of the Sumerian writing system. For 5000 years before the appearance of writing in Mesopotamia, there were small clay objects in abstract shapes, called clay tokens, that were apparently used for counting agricultural and manufactured goods.

This takes us back another 5000 years -- 10,000 years all told -- to the invention of clay tokens, a counting technology used for business purposes.

Cuneiform script (Wikipedia):
The cuneiform script was developed from pictographic proto-writing in the late 4th millennium BC, stemming from the near eastern token system used for accounting. These tokens were in use from the 9th millennium BC ...

"The 4th millennium BC spanned the years 4000 through 3001 BC."
"The 9th millennium BC spanned the years 9000 through 8001 BC."

I'm thinkin that the "token system used for accounting" is the same as the previously noted "clay token" system used for counting. The dates and the purposes suggest as much. This would mean, then, that between 10,000 years ago and 5000 years ago, Sumer moved from a clay token system, to proto-writing, to cuneiform script. And the earliest of those was already used for accounting.

There was accounting before there was writing. This suggests that business activity created the need for record-keeping, and the result was cuneiform. So the answer is yes, writing developed as a way to keep track of business data.

And if we go with the notion that "writing + cities = civilization" then the result was not only cuneiform script, but also civilization.

Economic activity makes the world go round.

AncientScripts:
As a spoken language, Sumerian died out around the 18th century BCE, but continued as a "learned" written language (much like Latin was during the Middle Ages in Europe). In this way, Sumerian was used continually until the 1st century CE, making it one of the longest used writing system in history.

"... much like Latin was during the Middle Ages", they say. That's the kind of comparison Arnold Toynbee would make. Cycle of Civilization stuff. Recurrences. History repeats itself -- or no, not exactly, but it rhymes.

Prehistoric numerals:
Early systems of counting using tally marks appear in the Upper Paleolithic. The first more complex systems develop in the Ancient Near East together with the development of early writing out of proto-writing systems.

Numerals originally developed from the use of tally marks as a counting aid, with the oldest examples being about 35,000 to 25,000 years old.

Counting aids like tally marks become more sophisticated in the Near Eastern Neolithic, developing into various types of proto-writing. The Cuneiform script develops out of proto-writing associated with keeping track of goods during the Chalcolithic.

"The Cuneiform script develops out of proto-writing associated with keeping track of goods". Again, economic ties. The development of writing was driven by self-interest, by the needs of people trying to make money.

Upper Paleolithic:
The Upper Paleolithic (or Upper Palaeolithic, Late Stone Age) is the third and last subdivision of the Paleolithic or Old Stone Age. Very broadly, it dates to between 50,000 and 10,000 years ago (the beginning of the Holocene), roughly coinciding with the appearance of behavioral modernity and before the advent of agriculture.

10,000 years ago: Modern behavior (and human nature) but as yet no agriculture.

Proto-writing:
The transition from proto-writing to the earliest fully developed writing systems took place in the late 4th to early 3rd millennium BCE in the Fertile Crescent. The Kish tablet, dated to 3500 BCE, reflects the stage of "proto-cuneiform", when what would become the cuneiform script of Sumer was still in the proto-writing stage. By the end of the 4th millennium BCE, this symbol system had evolved into a method of keeping accounts ...
This was gradually augmented with pictographic writing using a sharp stylus to indicate what was being counted. The transitional stage to a writing system proper takes place in the Jemdet Nasr period (31st to 30th centuries BCE).

"The 30th century BC ... lasted from the year 3000 BC to 2901 BC."

Okay: By 3500 BC (say 5500 years ago) it was proto-writing. By 3000 BC (5000 years ago) it was a fully developed method of keeping accounts, and over the next 100 years or so it became "a writing system proper".

Again: The economy drives civilization.

EDIT:
See also The accumulation of wealth gives rise to civilization -- one that I actually did finish.


The long, slow end of the learning curve:

	200,000 years ago:	Homo sapiens
	50,000 years ago:	Intelligent life
	35,000 years ago:	Tally marks as a counting aid
	10,000 years ago:	Clay Tokens used for accounting
	5,500 years ago:	Sumerian proto-writing
	5,000 years ago:	The Sumerian writing system

The accumulation of wealth gives rise to civilization

I left myself this note:

see
https://en.wikipedia.org/wiki/Civilization

and an excerpt from the file it links to:

All civilizations have depended on agriculture for subsistence, with the possible exception of some early civilizations in Peru which may have depended upon maritime resources. Grain farms can result in accumulated storage and a surplus of food, particularly when people use intensive agricultural techniques such as artificial fertilization, irrigation and crop rotation. It is possible but more difficult to accumulate horticultural production, and so civilizations based on horticultural gardening have been very rare. Grain surpluses have been especially important because grain can be stored for a long time. A surplus of food permits some people to do things besides produce food for a living: early civilizations included soldiers, artisans, priests and priestesses, and other people with specialized careers. A surplus of food results in a division of labour and a more diverse range of human activity, a defining trait of civilizations. However, in some places hunter-gatherers have had access to food surpluses, such as among some of the indigenous peoples of the Pacific Northwest and perhaps during the Mesolithic Natufian culture. It is possible that food surpluses and relatively large scale social organization and division of labour predates plant and animal domestication.

Civilizations have distinctly different settlement patterns from other societies. The word "civilization" is sometimes simply defined as "'living in cities'". Non-farmers tend to gather in cities to work and to trade.

Compared with other societies, civilizations have a more complex political structure, namely the state. State societies are more stratified than other societies; there is a greater difference among the social classes. The ruling class, normally concentrated in the cities, has control over much of the surplus and exercises its will through the actions of a government or bureaucracy. Morton Fried, a conflict theorist and Elman Service, an integration theorist, have classified human cultures based on political systems and social inequality.

I want to look at this, a fragment at a time.

"Grain farms can result in accumulated storage and a surplus of food" -- That's wealth. Grain farms can result in the accumulation of wealth, which is the basis of civilization.

"It is possible but more difficult to accumulate horticultural production, and so civilizations based on horticultural gardening have been very rare." -- Supporting the view that the accumulation of wealth is necessary for the rise of civilization.

"Grain surpluses have been especially important because grain can be stored for a long time." -- Grain surpluses, important not because we know everyone has enough to eat, but because we can add the surplus to our accumulation and be confident it won't go bad "for a long time". We're not treating grain as food here. We're treating it as wealth.

"A surplus of food permits some people to do things besides produce food for a living... A surplus of food results in a division of labour and a more diverse range of human activity, a defining trait of civilizations." -- Yes. And this defining trait of civilization arises because of the accumulation of wealth: The accumulation of wealth gives rise to civilization.

"However, in some places hunter-gatherers have had access to food surpluses, such as among some of the indigenous peoples of the Pacific Northwest and perhaps during the Mesolithic Natufian culture. It is possible that food surpluses and relatively large scale social organization and division of labour predates plant and animal domestication."

Okay, now I have to stop. They begin this thought with the word however which means they're about to disagree with the previous thoughts in the paragraph (and with my evaluation of them). Here:

"However, in some places hunter-gatherers have had access to food surpluses..."

It's easy to guess the unstated conclusion of that thought:

... but they were only hunter-gatherers, not a civilization.

This interpretation of their meaning is supported elsewhere in the article:

Morton Fried, a conflict theorist and Elman Service, an integration theorist, have classified human cultures based on political systems and social inequality. This system of classification contains four categories

• Hunter-gatherer bands, which are generally egalitarian.
• Horticultural/pastoral societies in which there are generally two inherited social classes; chief and commoner.
• Highly stratified structures, or chiefdoms, with several inherited social classes: king, noble, freemen, serf and slave.
• Civilizations, with complex social hierarchies and organized, institutional governments.

By this list, hunter-gatherers are the least complex category and civilizations the most complex category of human culture.

Okay. Perhaps we should say the accumulation of wealth is a necessary but not sufficient prerequisite for the rise of civilization. Perhaps; but we don't know that for sure. So let's just say the accumulation of wealth does not necessarily give rise to civilization.

But we don't know that, either. "All civilizations have depended on agriculture for subsistence," the article says. It may be that, given enough time, the accumulation of wealth does necessarily give rise to civilization. In any case there is a clear connection between civilization and accumulation of wealth.


Go back to what Wikipedia said about the hunter-gatherers: "in some places hunter-gatherers have had access to food surpluses". They give one example and one perhaps:

• some of the indigenous peoples of the Pacific Northwest
• and perhaps during the Mesolithic Natufian culture.

"It is possible," they conclude, that food surpluses (and relatively large scale social organization, and the division of labor) predate plant and animal domestication.

Okay. But a natural surplus of food -- good hunting and fishing, say -- is not the same as accumulation of wealth. The salmon that were "central" to the Indigenous peoples of the Pacific Northwest Coast were a "resource" provided by nature and owned by no one.

The natural surplus didn't exist because people had been accumulating it.

It's not that food was plentiful because the people were good gatherers. Rather the reverse: The people did well and their population grew because food was plentiful. "At one point the region had the highest population density of a region inhabited by Aboriginal peoples in Canada."

And they did develop "relatively large scale social organization and division of labour". Sounds like they were on their way to becoming a civilization.

I can see that a natural surplus of food could make civilization slow to develop. For the accumulation of wealth would have to depend on needs other than food. Newer, bigger, nicer homes, for example, or better tools to hunt and gather with.

The accumulation of wealth also depends on the concept of ownership. You know: This land is your land, this land is my land.

(with apologies to Woody Guthrie)

Development of the concept of ownership might be hindered by plentiful food. And if cultural development got the jump on wealth accumulation, and cultural growth outpaced the growth of wealth -- likely conditions, I should think, early on, among the indigenous peoples of the Pacific Northwest -- then the concept of ownership might even have been suppressed by a cultural imperative.

And as for the Natufians:

The culture was unusual in that it supported a sedentary or semi-sedentary population even before the introduction of agriculture. The Natufian communities may be the ancestors of the builders of the first Neolithic settlements of the region, which may have been the earliest in the world. Natufians founded Jericho which may be the oldest city in the world. Some evidence suggests deliberate cultivation of cereals...

Generally, though, Natufians exploited wild cereals.

Wild cereals. And they hunted gazelle. So again, nature provided. So there wasn't much need for farming. So there wasn't much of a chance for wealth to accumulate. And they didn't develop a civilization. Coincidence? Not likely.

More likely, the absence of civilization is evidence that they did indeed have natural food surpluses, not possibly, but definitely.

The process by which the cycle of civilization moves beyond its "capitalism" phase

Hussman:

Put simply, when U.S. corporate profits are unusually high, it’s typically an indication that households and the government are cutting their savings and going into debt.

Hussman is advising investors. He's offering a bit of wisdom, describing something that "typically" happens.

I'm thinking: If it typically happens, it's a process and it has an end result. In this case the end result affects where we are on the Cycle of Civilization.

Now you know.

The consensus is dangerously wrong, Palley says

Following up on Palley's latest:

NIRP has quickly become a consensus policy within the economics establishment. This paper argues that consensus is dangerously wrong, resting on flawed theory and flawed policy assessment...

If the consensus is wrong, it means our solution is part of the problem.

If the consensus is dangerously wrong, it means the problem is bigger than we think.


"In a growing civilization," Arnold J. Toynbee wrote, "a challenge meets with a successful response which proceeds to generate another and a different challenge which meets with another successful response."

"There is no term to this process of growth" -- there is no end to it, he says -- "unless and until a challenge arises which the civilization in question fails to meet--a tragic event which means a cessation of growth and what we have called a breakdown. Here the correlative rhythm begins. The challenge has not been met, but it nonetheless continues to present itself. A second convulsive effort is made to meet it, and, if this succeeds, growth will of course be resumed."

The depressions and great recessions of the capitalist era are the "rhythmical challenge" that we have failed to meet. Our economic troubles will defeat us unless we rise to the challenge. And, by "they will defeat us" I mean civilization dies, as Toynbee said. It's on us.

People who speak of "the end of the American century", people who express concern about the rise of totalitarian governments, they see it coming.

The Breakdown

"The nature of the breakdown can be summed up in three points," Toynbee wrote:

• "a failure of creative power in the creative minority, which henceforth becomes a merely 'dominant' minority;"
• "an answering withdrawal of allegiance and mimesis on the part of the majority;"
• "a consequent loss of social unity in the society as a whole."

Losing its creativity, the creative minority becomes a merely dominant minority. Government becomes more oppressive. A common complaint today, government is more oppressive.

Everybody complains about government, these days. "Withdrawal of allegiance", that is. But we can't solve our problems by focusing on government. What's missing is the "creativity". To fix the problem, we need the right solution to the right problem. Changing the government doesn't necessarily do it. Toynbee thought creativity solves the problem.

By "creativity" Toynbee meant the problem-solving ability.

If it sounds like circular argument when I say it, then I'm not saying it right.

Where we are now is late in the process. Things now are so bad that we see government as the problem. But that's a cascade effect. When "a challenge meets with a successful response", civilization continues to grow. But when there is no successful response, there are consequences. These consequences we call problems.

They are problems. But they are consequences. They are "cascade effect" problems. They are results, and you can't solve results. You have to solve the problem. Identify and solve the problem.

We have to solve the original problem, the one that keeps coming back. "Here the correlative rhythm begins," Toynbee said. "The challenge has not been met, but it nonetheless continues to present itself."

What causes depressions and great recessions? Thomas Palley identifies the problem:

... the flawed model of growth, based on debt and asset price inflation, which has already done such harm.

It is a problem of our own making. That's what makes it so difficult to solve. We think of it as our solution.

Our solution is part of the problem, and the problem is bigger than we think.

The rise and fall of civilizations is an economic cycle

Item:

Civilization may be seen in the rise and fall of cities.

Item:

The cycle of civilization is a cycle of dispersion and concentration of wealth. The growth and decay of cities and nation-states is evidence of that cycle. The "saucer-shaped" pattern traced by interest rates during the course of ancient civilizations is evidence of that cycle. The inequality that troubles Piketty is evidence of that cycle.

Item:

If the growth of wealth outpaces the concentration of wealth, times are good; otherwise, not.

Item:

Arnold J. Toynbee showed that civilizations rise and fall in a recognizable pattern. Homer and Sylla show that interest rates are intimately involved in the process. Keynes identified the interest-rate trough in the cycle of civilization as "the greatest age of the inducement to investment."