Gold's Role in Economic History

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Weights and Measures: What Use is Gold Good For?
There is one very compelling example of trading connections establishing worth, the failure of
gold to ever stabilize economic conditions. Gold is a relic of plunder economics. Every time it
has been put into vogue there has followed another round of pillaging the purses of the hard
working public by the political elite as the gold fetish enables can be done.
People have always created the credit value of their 'money' whether, shells; credit contracts in
the Middle Ages or for trade financings getting through Napoleonic wars; equities financing
huge industries only a few could not; or, debt repurchase contracts banks use to resolve their
reserve levels today. It is in these social agreements granting the credit invoked between traders
that worth and accumulation of capital is measured. It is not in gold and silver that become
ciphers for the wealth they stand-in for. These are commodities that have their own purpose in
dealing with strangers to the trading environ. But it is among trading connections actual wealth is
created by those agreements, as trading connections. Gold and silver are interlopers.
So many of the economic HIS-tories [and they are still sticking to it] fantasize as representative
facts they made from their fiction. These HIS-tories are used to post-rationalize economic
thought experiments1
. Such ‘case studies’ are the bias constructed fallacy of economics as it is an
historicist revisionism of reality we live. It just seems to take our eyes off the ‘ball’ all the time.
Inflation in Rome was not such a contributing factor to its decline as Gibbon added to 'moral'
decline of its ruler’s class. There were hot spots, but Roman inflation2
averaged 1.5% per annum
over 600 years while coin was clipped (quite usually by the public as relic coins confirm) and,
both steadily 'lightened' in statute weight and debased by emperors following the precedents
Augustus saw practised by the Ptolemy priests. Different morals than Gibbon alludes were in
play before the salacious ones most prefer to dwell on with the reigns of Caligula to Justinian
and Theodora colours Gibbon’s story.
As for those “Dark Ages” rise of Christian ecclesiasts isolation and Muslim evangelism
diminishing trade, there are many conflicts in that framing of history we have been conditioned
to receive. Not the least conflict is that gross world product steadily grew faster 600 to 1200 AD
than in Roman Empire days. Through overcoming the turmoils of, brigandry on land; piracy at
1
K Popper, The Poverty of Historicism, London, 1957, section 31
2
Peter Temin, The Roman Market Economy, Princeton University Press, 2012
“the rich must use silver when purchasing from the poor” Code of Urukagina c. 2380 BCE
"Aegisthos the traitor promised him two nuggets of gold as a wage" - Homer, Odysseus, 850 BC?
“...land, 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" – diasporas’ victims, in all epochs

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sea; crusades to save the souls of crusaders; repeated famines and endemic plague there was
more than 6 fold increase3
in estimated gross world production while 80% increase in estimated
world population. Through these troubled times they were even busier engaging in capital
accumulation as they grew their families.
During Roman hegemony from 1 to 600 AD gross world production declined in relation to
population. Population then grew gently except in times of extensive wars, famine and plague,
just more than doubled from 1 AD to 1200, but the sharp declines of 1315 famines and 1350
plague took nearly a third of world populations in less than 40 years. Population recovery would
take beyond 1400, and then triple by 18004
. What remains in these numbers is that from 1 to 600
AD interval of Roman hegemony world production per capita declined to 2/3rds in relation to
population growth. From 600 to 1200 AD the early and middle of Medieval times world
production increased at just above the rate of population growth. From 1200 to 1800 gross world
production doubled per capita. There are two relative constants 1 AD through to 1800, technical
means of production; and, living conditions made very slight innovations.
What is distinctive is the advance of trading and finance which conventional economic history
says did not happen, but clearly it did. Both Marc Bloch and Henri Pirene insisted trade did not
advance until the minting of new livres in Paris. Well actually, the opening of new mines at
Rammelsburg allowed a great expansion of silver coin issue throughout western Europe. The
ecclesiasts had withdrawn gold from circulation in an exercise of what we call Graham’s Law.
As chronicles indicate gold coin had near disappeared with silver coin predominate but silver too
was in short supply. It was the express intent of Henry II at Goslar to facilitate trading 250 years
earlier as there was a noted shortage of coin for trading as means to ease transaction costs, and
seemingly that did help.
There was great concern with ensuring a fair coin through the early to middle Medieval era.
Direct evidence we see resides in every museum coin collection. Those museum coins show the
problem of public clipping as near all relic coins are clipped. By the time of Edgar I in England
975 through Edward I, 1066, coins were being recalled for reminting to statute weight every 2.4
years as an obligation to maintain fair value coin. English wool tax on trade was used by their
kings to buy German silver for minting new fair value coin.
This concern for fair value (present in the coin) was derived from a biblical concern appearing
several times in Solomon’s Proverbs, 11:1; 17:3; 20:10; 20:20; and, 25:4, (nearly as many times
as concern for averence of whores) written before coin even existed as we also know. Purity and
weight was the issue. Silver was easily alloyed with baser metals. Gold purity was more easily
seen and tested. This fair value construct as such was established by Council of Nicea, 325 AD,
prohibition of usury as a rate exceeding the Roman statute limitation of 12.7% or 1% per month
3
J. Bradford DeLong (24 May 1998). "Estimating World GDP, One Million B.C. – Present"
4
McEvedy, Colin and Richard Jones, 1978, "Atlas of World Population History," Facts on File, New York

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was prohibited of ecclesiasts. Even Tiberius5
had been unable to charge that rate for loaning out
of treasury funds as public rates were often much lower, as little as 4%, in the two centuries
transition from republic to empire. Most medieval coin was being minted by monastery
moneyers as became a part of their social duty ensuring fair value.
Also as in-kind tithe payment was set aside in the 5th
century in favour of coin payment, as
Roman tax was also, ready cash was found in control of monasteries and bishops. Abbots and
bishops really had the cash in their control as well as the precious metals. The seigneurage for
minting was the domain of the monasteries and bishops.
Where was a duke or king to turn for financing his warring on his neighbours for profit or
redeeming his soul on crusade but deal with the church? William of Normandy brought a
solution with him to England with the Jewish merchant bankers. They were familiar with letters
of credit used in trade and were a competing source for ready cash. The competition was
welcome as rather than interest on mortgage the church favoured vif-gage holding the equivalent
land as security for its cash until the cash was repaid. The production of this land held was owed
to the church during its tenure as security under vif-gage practices. The result was a near 75%
interest charge. as the land was apportioned in accordance with Leviticus style of valuation.
The problem went unconsidered that biblical production, when Leviticus proscriptions originate
prior to 800 BCE, was less than half that of medieval times which had the benefit of the Roman
innovation of two crop rotation. Adoption of three field rotation of crops in the middle and late
medieval times brought further improvements of yield. Biblical conditions when Leviticus
established the ratio of shekels of barley or wheat to silver, crops often yielded only 3:1 in poor
years and 7:1 in the good years. In fact even in the fertile Euphrates and Nile alluvial valleys
famine was prevalent as crops failed for several years in a row when the rivers flooding did not
replenish the soil nutrient to fields before practice of crop rotation benefit was learned.
The entire concept of interest originates on the return of seed grain loaned to cultivation by the
needy in a society from those who had grain. It was deemed appropriate the creditor should be
returned a measure in addition equal to that measure loaned, 2:1, 50% gain to the creditor in the
end of harvest from sowing a crop with the loaned seed (the creditor might have gained 3 to 7
fold if he planted and applied his own labour, presuming he had sufficient land available). In
surviving Babylonian cuneiform records interest was typically charged at 33% in consequence.
Harvest time traditionally was when such accounts were settled. Harvest markets were usually
the occasion for these settlements of debts.
The subject of usury - beyond 12.7% or 1% per month established by the Council of Nicea as a
business matter setting interest at the official Roman state rate - became very touchy indeed as
the newer monastic Orders of the 11th
century on moved away from poverty, chastity, work and
quiet life of contemplation, to building new monasteries and churches to the greater glory of the
5
Sidney Homer, Richard Eugene Sylla, A History of Interest Rates, 4
th
ed. Rutgers University Press, New Jersey, 2005

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life everlasting and those running the concession for remission of wrongs. We owe the gothic
cathedral and the rebuilding of Rome to this theme which rode through the Great Schism when
rival factions competed for control of the papacy and the curia.
The Bank of England6
acquired funds at 3.8% in 1697. Through 1700 the BoE rate was 5%. In
1800 their rate fluctuated with rising demands for financing new industry, but from Napoleonic
War rate of 6%, Crimean War financing would push the rate to 10% in 1857, as would again
occur during First World War.
The average rate of US bonds has been 5.18% since 17907
. The highest rate occurred in 1981
with bonds at 14% when 21% might not buy you a first mortgage.
Capital accumulation, there is the story research should follow but has not. It confuses their
thesis and its narratives.
The biggest difficulty of the middle ages millennium, early to late, was their reliance on coinage
which (according Graham's Law) gold specie were withdrawn from circulation by Bishops
hoarding, while they became trusted as moneyers minting coin - bezants and florins just were not
circulated - in successively lightened and debased silver. Traders had to invent letters of credit
amongst themselves and their bankers to enable trading to resume in times when brigandry
prevailed.
The Saxon kings of England had to regularly reclaim coin and pay for their reminting in statute
weights, by buying silver (in exchange for taxes on trade, much of that in wool to Flanders) from
new mines at Goslar. The kings eventually established their royal mints and ring-fenced the
bishops practices of vif-gage and mortmain acquisition by which they had expanded their real
estate holdings by 27% skimmed from the latterly pious anxious to redeem their immortal souls
with indulgences and free their land from royal taxation while alive.
Having endured and overcome the perfidies of his elder brothers, Henry I of England brought in
the responsibility of all to law with the Charter of Liberties of 1100 to protect, the nobility rights
in granting his power; and, his bankers, Then also, he proceeded to reign in mortmain practices
of the church capital accumulation, beyond those of vif-gage. These issues were not lost on his
rightful heir. Henry II appointed, his onetime sheriff assigned to protect Aaron of Lincoln; and
eventual, Judiciar, Ranulph de Glanville, to write the first law of mortgages and then the
Tractatus that formed the first codified basis of English Common Law. Henry’s unruly sons
would have to be compelled to abide this context with the Magna Carta. The Pope was not too
pleased with the Magna Carta but eventually Henry VIII settled these matters.
6
http://www.theguardian.com/business/interactive/2008/nov/05/interest-rates-history
7
http://finance.yahoo.com/blogs/talking-numbers/222-years-interest-history-one-chart-173358843.html

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Accurate records in account books are hard to find outside the Vatican, which is not inclined to
allow such scholarship pursuit. There are some other sources but most often these are anecdotal.
In France from 1200 to 1500 inflation averaged 0.004% as Norbert Elias confirms. From 1515 to
1610 the livre was 'split' 5:1, while inflation (65:25) was 0.0096% per annum, while nobility
widely claimed inflation cost them their estates relative value in devalued production. Amazing
they ignored the earlier bishops, as the later Valois and Bourbon kings were the real 'villeins'.
TRUST BUT VERIFY, an important aphorism the diet of economics has yet to digest.
Economics is based on thought experiment conjectures they have called theory. Being a social
science they then seek case study histories to make and rationalize their position. History is their
ally, most selectively biased. It is very political in the sense that it is designed to serve the
interests of those who propound such theories. History as case study is most often in the service
of obtaining certification in these elegant epicycles that prove nothing about the real world
economy. Monetary theory is based in such sand of the unprovable.
The concept of credit float and debt float is what drove the creation of letters of credit in business
of traders in the medieval world as it had in the Neolithic. Trade and debt were measured in
shekels of grain and then with the rise of Chalcolithic times smelting of metals shekel weight
equated to weight of silver prior to coinage invention. Trust in with whom you trade is relevant
in letter of credit or specie as exchange mediums. When either the credit or the specie are corrupt
there will be difficulties.
Wisdom begins with the proper names of things is an old and enduring epithet. Economics is a
mindset and study rife with terms and mislabellings even in deriving its root from the Greek,
eikos which is not arête, we translate as virtue but, is "the proper management of one's own
affairs, how best to run one's household,” arete, as Plato used in the Pythagoras “the
management of public affairs, how to make the most effective contribution to the affairs of the
city by word and action" discourse on ethics[7
. Money is credited with evoking trade revival in
the late Middle ages, more particularly attaching this to the Paris mint issued livres in the late
13th
century. That discounts the expanded minting of coin at Goslar at the first millennium by
Henry II 250 years earlier. “Chaque a son gout” is not likely to give us any wisdom that endures.
The town is supposed the beginning of trade when evidence is trade extended across tribes and
lands 25,000 years before settlements like Gobekli Tepe which show no agora. That is an
inconvenient fact though long suspected before the Austrian School drew its foundations in
Bӧhm-Bauwerk’s assertions. Teenaged readers of Ayn Rand’s bounded world grab at her
unreasoned fetish for the precious metal. In Rand’s world gold mystically appears without its
99.9% waste rock and arsenic spoil and outside all relationship to its factual place in history. In
her defence she swallowed this pudding in grade school in the myths propounded by Bӧhm-
Bauwerk’s assertions. We still are fed on that pudding up into graduate schools today.
In the resulting dialectic from Bӧhm-Bauwerk’s assertions to Schumpeter, Capitalism may be
put to question but the urgency of capital appreciation as a human behaviour resulting from

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adding value in the business process cannot ever be in doubt. Credit float and debit float are the
keystones of that business process, not specie. Economic curiosity and theory has not gone there.
All the enthusiastic gold standard newspeak being thrown about by the TEAnaged-brains-trust
these days amounts to a shortage of corn syrup, another tasteless political sweetener put to broad
and unhealthy use. Coin specie was first invented in Phaidon’s Arcadian silver and later Alyttes
father of Croesus’ Lydian electrum gold, but ‘money’ as an exchange medium has been in
archeological evidence for 35,000 years, first in high-value added artefacts for status goods and
their raw inputs in shells and amber, before agriculture, pottery or metals were known or towns
invented. Informal monies such as these have been tendered where and as market traders agree.
To think otherwise as is common newspeak these days promoting an asocial aberration of
markets function aimed to sequester value to isolated constituencies. Gold does that by shrinking
value added and accumulated in our letters of credit to the volume of gold in circulation. That is
truly dangerous proposal we have seen ruin nations and international trade.
Gold specie as formal ‘money’ has been successively used in history for oppressing market
participant behaviours. Gold’s effect has always been to extract value from entrepreneurial
traders activity not least in taxation coinage made possible, in lieu of in-kind tithe and tribute.
Hoarders of the metals exploit markets held hostage to shocks as fair markets are terminated.
These are lessons history rhymes with, case after case. In American history alone, we have
successive depressions of ever longer duration following Jay Gould’s attempt with monetary
silver; the run from silver prompted by the Kaiser’s beef with Paris; and then, as 1907
underscores the necessity for creation of Federal Reserve banking, following J. P. Morgan’s use
of his gold hoard to corral then President Theodore Roosevelt in his own West Wing office into
ignoring Sherman Anti-trust law for Morgan’s takeover of Tennessee Oil and Coal, by Morgan’s
holding his fellow New York bankers and the American Stock Exchange hostage. Until today
where for the first time we lose 12 % of annual gold production going into uneconomic recovery
given scant use in smartphones and computers going to land fill, corralling real economy value
into others purses has been the primary function of gold when not a status decoration.
A homer of grain is about eleven bushels. two-row barley specifies a test weight of 48.8 lb/bu.
Ancient pre-green-revolution wheat yields of about 750 kg/ha. At Tell Halula, an early
agricultural site, ranging from Middle Pre-Pottery Neolithic B (PPNB, c. 9550 bp calibrated) to
Late Neolithic (Pre-Halaf, c. 8630 bp calibrated) the earliest archaeological settlement in the
Middle Euphrates region (Rakka Governorate, Syria) at which the cultivation of domesticated
naked wheat has been reported. Productivity, calculated from of wheat grains found at this site,
was relatively high, with an average 1560 kg/ha. present-day wheat crops under irrigation yield
of 3830 kg/ha
There is an interesting article in The Economist on which I commented before, Free exchange,
On the origin of specie: Theories on where money comes from say something about where the
dollar and euro will go. It makes interesting errors in drawing from history, and as an editorial

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board reviewed copy that would appear to be based in conventional wisdom. We have scales to
measure weights. Karl Menger, an Austrian economist, set out one school of thought as long ago
as 1892*. In his version of events, the monetisation of an economy starts when agricultural
communities move away from subsistence farming and start to specialise.
“The origin of money is a market-led response to barter costs, in which the best money ...
evolves to reduce barter costs, with some things working better than others ... something
that is 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.
But since when is metal and coin relevant to the equation? Metals were factually unknown to the
earliest tell cultures already discovered and as known to economic historians and theorists before
Menger summarized his perspective that is a foundation of teaching from grade school to
Doctorate candidate still today. This theory is just convenient story and they are still sticking to
it. Tell cultures which were already engaged in wide spread and distant trade of necessities such
as flints and artefact trade goods in the form of bone, horn and ivory worked into decorative and
fetish objects of very high value to our culture, at very least in display. Shells have no intrinsic
use or value until laboriously worked into artefacts that become cult or fetish goods.
Yet, shells are usually found in these sites Palaeolithic to Neolithic not just as the by-product of
food use of molluscs. Small colourful and hard the cowry species Cypraea moneta is found both
loose and as jewellery in caves, village tell mounds and burial tumulus. The cowry shell
eventually became the monetary device chosen even before the threshold of Chalcolithic Age of
copper use, before the discovery of tin alloy dawned the Bronze Age. Bone used to make flutes
are known 35,000 years old. Jewels were near useless mineral lumps that could be readily
ignored as having no value until later finding they could be cut and polished adding value
expressed into marvelous artefact. For their aromatic and therapeutic uses amber, frankincense
and myrrh held greater value. No stone tool could be made sufficiently thin to bore a pearl
thickness until metal wires. Simple stone grinding of the cowry shell ends permitted their use as
strung beads and as lose caches in bags were ready for trade.
The possession of such bone and shell goods offered high status value in early cultures preceding
the surplus paradigm machination of Menger’s supposed full grown trade village convention
suddenly arising of which ready acceptance has obscured deeper look at monetisation. The
automatic is not a universally useful response. By its successes have we become predisposed
from our mechanization of manufacture to preferring and seeking the mechanised relationship in
the most unlikely exchanges? Details set aside a century ago in favour of a sleek story line
contemporary historians methodology have restored to forefront. Economists need to reconsider
convenient past models underlying their understanding of economic as live social condition, or
risk their work become irrelevant.

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The necessity of exchange value place holder is of social and of individual need and terms of
those needs sufficient incentive for agreement. Not the supposed conflict Menger conditions
debate with that, “makes unquestionably for the common interest, and yet which seems to
conflict with the nearest and immediate interests of contracting individuals.8
” It is individual
mediated best served interests that generates common agreement, even in face of conflicts.
Informal monies have always been invoked by traders’ agreement. Formal monies are useful to
collect taxes and accordingly are nvoked by governments as sole legal tender within their
borders. The precious metals remain variable in value, which is ignored when argued it is their
inherent stability and yet suspend the reality they daily fluctuate with market trade. A penny that
costs 1.5 to make is not a suitable coin any longer. Coin specie must represent more value than
the metal or they will be hoarded and taken out of circulation, corollary to Graham.s Law, as
happened in Europe’s Middle Ages as monasteries tithe payments were required in coin rather
than trade . This precious metal specie is all nonsense fetish. Commodity remains in demand
through all desperate times and such as whiskey from home-stills remains effective liquid
‘money’ in such times as experienced hyperinflation after both wars in Austria and Germany.
Surplus was more usually rare than Menger’s model requires. Trade presaged the town some
25,000 years before the earliest town typologies, and 35,000 before any formal money as coin
intervened. Research of irrigated Egyptian agriculture reveals surplus only occurring in every 1
of 3 years at best, though 1 in 7 more normal paradigm of pharaoh’s dream told to Joseph.
Further need to preserve and leverage advantage in crop surplus value is obtained by animal
husbandry. Higher value-added status goods can be and surely were created at all times as
archaeology confirms. These creations requiring sourcing of commodities like chert, flint, ivory,
amber or shells that may not be local need encompassing.
Surely, to be effective the business plan seeks a mechanization of process becoming organized
that job descriptions can be framed and conveyed in command with performance expectations set
that respond to developing the core business idea. Structure has its place. However, programme
and project management requires qualitative judgements more than quantitative measures.
Our discourse and exchange in society and culture is not mechanical or taciturn but symbolic and
lingual. Trade is normally a lingual exchange in negotiation over goods services and artifacts
confirmed by symbolisms of accounting ephemera. It is a distinction of our social evolvement
that we account in notation on near worthless paper, because it accelerates and eases the
exchange of goods, services in creating added value. That is a symbolic confidence arising from
our art and innovation. It is also what drives the money multiplier there being no necessity to
actually exchange specie, we are content with script or even a mental note until we reckon and
trade our effort for other value accrued (or not accrued).
8
Carl Menger, On the Origins of Money, Economic Journal, volume 2,(1892) p. 239-55, translated by C.A. Foley

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The desire to mechanize man is a residual view of our engineering ethos. Engineering gets
results, usually near enough but not always useful results. Man as the subject of engineering is
not an appropriate objective. Man and society are about art and culture. It is our arts that
distinguish human from animal most uniquely.
Tools and communications and their symbolic systems have all been raised far above the abilities
of animals by man through his art. The manufacture of strung shells as decoration is an earliest
fetish symbol of wealth. A Giffen good is created by this manufacture of art, the creation of
value added to make the artefact. Coins have greater value than matching their gold or metal
content commodity value and acquire similar Giffen value and function as according place
holder by the art added in agreement at least.
“Mr Goodhart called this the “Cartalist” theory. The fiscal wing of government has a
huge incentive to move its economy away from barter. Once money exists, income and
expenditure can be measured. That means they can be taxed. And the public purse gets a
second boost from seigniorage1
[sic], the difference between the value of the coins and
the cost of producing them.
The inherent advantage of reducing transaction costs as the burden of trade in kind is an issue the
ancients understood. We can see that as found inscribed in the oldest known social code of laws
to survive. Moreover significant in their subtle wisdom is their prescribing giving some potential
trading advantage to the poor enabling them to make more effective trade use of convenient
transportable precious metals wealth from their surplus grain or cattle. In a pure sense it was a
form of wealth distribution imposed by law, taking social action. Empower the poor that they
may more effectively trade in their producing fruits for which they labour. Surplus grain could
also be used by feeding cattle to store and multiply the wealth for later use. More wealth creation
starting at the bottom benefits all in the society we find is ancient wisdom scriven into law more
than four millennia old in the code Urukagina established in prototype democratic rule.
Conservatism is about planning and taking actions that can endure, not fashionable newspeak of
the day making convenient advantage for one constituency invoking servitude over others.
Where did economists get such lessons of history so wrong? For the libertarian understands his
freedom ends at my nose, my purse, my property protected by rule of law
The fallacy of gold is woven through ethos of the merchantilist and cartalist, both right and left
there is no policy direction to be obtained from their equal misguidance. Doggedly with their
rhetorical bones each dog persists they alone have truth. The historical bias has misled discussion
as money in lieu of gold as barter commodity. Menger to von Mises the confusion continues and
their unanswered question remains, “What is Money?”
“It is an error in economics, as prevalent as it is patent, that all commodities, at a definite
point of time and in a given market, may be assumed to stand to each other in a definite
relation of exchange, in other words, may be mutually exchanged in definite quantities at
will.”

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The same should be said for any specie coinage, yet such fixity is an aberration of market reality
and exactly what gold standard advocates requires.
One needs to reflect that the earliest text found of Old Testament reference in Bible or Koran
comes half millennium or more after the time as Homer’s surviving texts conveying a morality
play on the story of ethical decline and its consequences for an ancient ruling family feud.
Aegithos attempts to contract assassins to kill Agamemnon with gold nuggets not coins, while
Clytemnestra takes action herself.
The Dead Sea papyri scrolls are regarded as
of 500 BCE. Yet the Levites history of
Moses itself is thought to precede that of the
Mycenae plain rulers and Troy. The silver
coin as shekel weight of grain substitute is
referenced in Leviticus accounting of
transmission at Mt Sinai Thunder2
the laws
for the people in their covenant with God,
yet coinage had not yet been invoked as
artifice for trade in Moses time. The value of
agreement among and for us was certain.
Any agreement was then as always in its
being honoured as is the expectation of the
contributors quid pro quo. Certainly no less
significant than the Lord’s words being kept
in memory and deed. The tablets taken from
Mt Sinai are a record of agreement in the
covenant of the people with their God. In
other respects offerings of the people to
honour their relationship to the Lord were
accounted in kind, wheat, barley, oil, lambs,
kids or calves was a social action to honour
their keeping of this agreement brought to the ledgers of the priests. If the Levites did not keep
and honour their agreement retribution was certain, even if only for Moses and Aaron as
surrogates. Money changers at the temple are much later to enable the faithful buy the suitably
blessed offering in lieu of his own product earned in grace with his God.
Money is always informal in use. Any one currency is seen as more convenient or easier use in
the opinion and agreement of those using it in trade. It is chosen by market trading connections.
Cowrie shells were broadly used millennia earlier simply convenient token in exchange adopted
to satisfy the small exchange needs in trading a camel load of goods. The money cowry, cypraea
moneta, were evident as prehistoric “money” in use worldwide into the last century. When
governments ring-fence their markets as did the Ptolemies by the specie issued becomes the
means to invoke tax on traders. Augustus noted the practice for Roman rule.

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One needs to consider the origins of trade for scarce goods into any region from another.
Archaeological evidence survives of such trade from earliest times in both trans-alpine and
southern-seas goods found at both extremes of occident to orient. The “density of value”
ascribed metals made them more useful for larger mercantile entrepreneurial trading advantages
and enabling role. Outside its red-tinged-yellow 22-24 K colour and malleability range gold is
observably adulterated as “electrum” or other less valuable alloy of the precious metals. That
made it ready to purpose of those using the metal as substitution or value place holder as a
medium of exchange. Further, cheating was avoided by one-fifth value increase of metals
substitution offering for in-kind noted stipulated by Leviticus law. At a 20% ratio of alloy of
gold with less precious metal the difference in value is visually evident, this is a very practical
boundary on the metal substitution for in-kind trading. Testing by touchstone for purity3
is not
always practical in the context of the marketplace trading with those you may not know coming
from far away in need of your goods.
These stipulations opened the discussion of “interest”
charges at the same time in reference to forgiveness on
“jubilee” that a person’s inherited lands by birthright be
restored in the absence of their ability to completely
honour the bond of their debt. Therein was seen the
social need to avoid destitution of any family in society
in the event of failed expectations per credit agreement
involved. The risk becomes then that of the community
much the same as our modern bankruptcy laws
redemption of the Debtor Corporation or individual. The
individual we need to resume a useful role in the tribe al
society which is the objective of jubilee. This practice
also required censure of cheats who might double deal their family inheritance as security in
credit agreements stopping their redemption of that inheritance on jubilee. This penalty had the
effect of enriching the priesthood while substantiating their role as bankers in society. By the
time of Jesus, money-changing at the temple accommodated substitution of Levites offerings
prescribed by Leviticus in tribal law was a function of the priests selling sanctioned offerings.
Many other things have been said of Leviticus in interpretations of what are not there written,
and many things written there we will not further comment. For our discussion broad basis is in
these earliest surviving accounts of Judaic tribal trade laws. The precedents are in Semitic
culture, the surviving fragmentary record of Cuneiform Laws from fragmentary Urukagina to the
whole Hammurabi code text surviving on stele. Herein is basis of commerce and trade customs.
Foremost is the principle of agreement both among trading connections engaged in trade and to a
common law for governing such collective activity within the tribe. Trading connections moves
us beyond the palace and plunder economies of the Bronze Age transition that compelled
Abraham to take his family out of the turmoil and plunder. Trade is intrinsic human behaviour, a

“
context in all cultural texts that have survived. Coin as specie money is invented with the
advance of the Iron Age expansion of trade extending from Baltic to South China Seas.
Of these ancient economies their ashes run through all archaeology. Plunderers’ cost is too great
a loss of wealth imbued artifact for the society to bear witness. Trade needs to be encouraged for
any society to endure. Commonweal is the most important notion, ascendant as a survival
technique from pre-history. It has taken millennia for us to discard the plunderer’s revenue
stream in slave trade as foundation of creating wealth in its own society by pillaging others. It
remains wealth creation and distribution to the trading connections involved in that value added
creation founded in individual elective action with agreed trading connections. The greed of
those to whom we trust the safekeeping of our treasure we reel at for their sociopathic pillage,
whether, Sargon or Bill Sykes; Uriah Heap or Artful Dodger; J. P. Morgan or Jamie Diamond,
their enrichment is conspired as at the waste of much more others have allied to create. In the
words of J.P. to his lawyers, “I do not pay you to tell me what I cannot do, but to tell me how to
do what I want.” We all lose when rule of law is demeaned its intent.
Also in the surviving texts of Homer we clearly note substantive evidence exists for analysing
human impulse for trade. Any excess of subsistence production obtains the opportunity to trade.
The threshold of hunger and plenty is a broad range, so Menger’s supposing towns initiated trade
opportunity is the chicken held ahead of the egg, but this rationalisation given in grade schools is
uncritical thought product. Trade goods are archeological facts extending back before the earliest
record mounds of towns. The trade exercise is laden with difficulties of how a bushel of grain
realizes an artifact in exchange, these are transaction costs. As Urukagina upholds the use of
portable dense value holders in exchange allows productivity to embellish.
As social animals we exist in social collectives wherein individuals act by combining our efforts
to economic corporate activity in which we all to varying degree subject ourselves and gain
benefit. Some regard this as altruism, but it is the subject of our laws agreeing to corporate
persons that from this altruism there is social advance in commonweal. It is within this
framework where social benefits arise that self must also be rewarded with the aggregate benefit
greater than the collective separate interests or there results mere stasis or decline.
Society‘s expectations are in exchange for accepting the potential risks of failures as public
liability, successful corporate results from their public financing at more than just arm’s length
from those managing corporate affairs. Agency risk is inherent at the same time accepting there
will be failures when we collectively bear as public liability (corporations) in which we have
invoked rights as fictitious persons and invested our treasure. Society needs to enjoy the public
liability corporate successes as its rightful benefits as well for their risk. Leviticus prescription of
jubilee maintaining some social cohesion by forgiveness is displaced by bankruptcy procedures
Residual greater value must always be preponderant, or the miner’s gold will not be worth his
innovation, his wage or his capital invested if he is a proprietary owner in the merchant-owner
mold. The public liability corporation must like benefit in the preponderance or it fails.
Capitalism must always seek to create greater value output than inputs as its objective, its goal-

“
directed behaviour. Corporations are social creations beyond the capacity of former means of
legal development as sole proprietors or partnerships. These social creations are financed to
address greater needs of modern enterprises science had enabled. Their risks of failure are
inherent but the selfish can subourn them to their personal aggrandizement without laws to
enforce the moral hazard does not become the habit of their manager agents. Without such laws
plunder notions evolve at expense of the public benefit corporations are supposed by quid pro
quo at law to provide.
The real value to society is in the flow resulting from economic activity empowered by their
advancement. That flow begins and is concluded in transactions measured and accounted for by
their agreements between the trading connections participating in the enterprise, nurturing it into
existence and continuing. Wealth flowing as shareholder cash primes the mechanism others float
and power forward by extending their own credit to the venture adding value in the process.
Economics takes little account of the trading function through its participants and what they
intend to achieve by their connection through the economic enterprise they contemplate. The
term for these participants, as the trading connections, is absent all of main stream economic
theory. Transaction costs as reference in the making of trading connections agreements is absent
but the few critical thinkers, and ignored by the main stream rhetoric. These few are the tolerated
misfits main stream cannot use without a leash and handle for their understanding.
The value the trading connections invest in the enterprise creation and add to achieve more than
the summing of the parts. The worth of those trading connections is demonstrated in the balance
sheet through analysis of the other parts that native shareholder debt, N; bondholder debt
instruments, B; and, working loans, W patterns expose. The N, B, W elements exist in ratio
according to the money worth invested also by the worth trading connections add to float of the
enterprise not otherwise accounted in GAPP conventions. That combined worth, N*, B*, W*, is
expressed by our analysis thereby determining the Risk Price we use to determine the range of
“likeables” of which we are able to inform our methods. These elements contribute to the
business process acting as a whole creating more or less value, more and less float permitting the
firm to be solvent or not, by degree banksorpt or bankrupt, in the behavioural spectrum of its
process business conduct.
Ayn Rand, Ron Paul as Paul Ryan all among others of more weight do not answer to the nature
of gold as barter commodity. Their new styled “Objectivism” has no merits as economic theory
without enslavement or other exploitation of others noses, purses or property (personal weal or
common) laying in its basis to work the mines. Capital is not in economic terms of money or
gold but the economic enterprise agreed creations relying on innovation, share equity and sweat
equity on which also bond debt draws and working loans feed.
The notional precedes the factual pre-eminence of American dollars over others is the innovation
of the economy underlying it that others find need to trade with. Translating that need through
any commodity such as gold is a pure abstract restriction of trade and adds transaction costs with
no necessity. The effect is to raise the value of that commodity by making it a Veblen good,

“
actually all that gold has ever been a status good with little other utility as a metal. Its ostentation
in its conspicuous display has always been the source of its value in pure social status terms.
The conventional investment industry cannot prove any of their assumptions underlying their
methods. As we have shown, luck is all that they trade in - whether actual proven result of 1.03
to 1 or 0.98 to 1 - is just a coin-toss, not adding value. A tautology is just repetition until it
appears to us logical. Lies told often enough are expedient newspeak and can even become
politically correct.
In our Modal Geometry "theory of the firm4
" we make only two assumptions, clearly as follows:
1. there is a balance sheet of the firm (that the rule of law governs its information is
possibly weak assumption but at an accuracy to at least the modest degree accountants
are prepared to be responsible for); and,
2. the firm will vigorously negotiate, “what it owns” (in order to stay in business “what is
owed to it” with “what it owes” and vice versa, to make the best of what it has, that is in
its trading connections).
The Modal Geometry theory of the firm has unfolded more by rigourous observation in the real
world of corporate ledgers relation to balance sheets. That is aided with logic, epistemology, and
some powerful mathematics, not just conventional assumptions with little relevance or real
science.
Our reasons for having any equity in our portfolios are clear, concise and consistent. “likeables”
are equities shown valued by investors, tending to continuing gain, which investors have
demonstrated a determination to buy and hold at stock prices above the price of risk. That
tendency demonstrates 2 of 3 “likeables” gaining for the long term, as we continue to show.
Proof is positive, as our TaxCharityTM
and BookBuilderTM
portfolios show. We extend our
proprietary information to small investors, because we can. No one else can, while the entire
industry is so busy just blowing bubbles5
with cash from your wallet.
Know What You Have. Have What You Know.
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.
Our view is risk averse. Of course we require a fee for doing that. Mail us for our help.
Hans Goetze,
Architypes Inc and StockTakers Limited

“
Head Office
76 Midridge Close SE
Calgary, AB
T2X 1G1
72 Cornwall Street
Toronto, ON
M5A 4K5
351 Chemin Boulanger
Sutton, PQ
J0E 2K0
450 538-1270
1
As opposed to the other allied modern definition “the amount of goods and services that the government obtains by printing new money in a
given period.”
2
Mt Sinai Thunder is a J. M. W. Turner proof print in private collection
3
a test not known before 3300 BCE suggesting Leviticus rules pre-existing Abraham leaving for peace in Cannan
4
E. Goetze,“The Modal Geometry of the Firm and the Balance Sheet Worth of the Trading Connections”, 2006, available on
request or, http://riskwerk.com/2014/03/15/pi-the-process/
5
http://riskwerk.com/2013/10/14/asset-bubbles-day-october-14-2013/

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