Debt, Debasement and Capital
What Debasement Has Been Used For
The same mechanism, from Nero to the twentieth century, and what it was almost always paying for.
9 min90 XP available4 challenges
Put these in order
Put the mechanism in order. It has not changed in two thousand years.
Earliest cause at the top
The unit of account is degraded
Less silver in the coin, more notes off the press, more bonds onto the central bank
The state takes on an obligation it cannot tax for
Usually a war; sometimes a promise made to a domestic constituency
Taxing or borrowing further becomes politically impossible
Both require someone to agree, and nobody will
Prices rise, and real obligations shrink
Wages, pensions and bondholders absorb the difference
The consequence is blamed on merchants, speculators or foreigners
Diocletian’s price edict of 301 carried the death penalty
Answer to continue.