Needham’s Question is why did the development technology in western European accelerate much faster than in China after 1600.Magic, maths and money
The issue that Needham wanted to tackle was that China had the physical and intellectual resources, mathematics, alchemy, astrology and magic, just as Renaissance Europe did, but it did not develop science as Europe did.
One key distinguishing feature between the science that emerged in western Europe in the seventeenth century and other scientific cultures was the use of mathematics. Aristotle, and his heirs, did not think that physics was reducible to mathematics, similarly the Chinese and Indians did not apply maths to solving scientific problems in the way Newton and Clerk Maxwell did.
One answer to why European science adopted mathematics lies in medieval European finance. Medieval Western Europe was unique in having to deal simultaneously with a heterogeneity of currency and prohibitions of usury. Muslims had the usury prohibitions but homogeneous currency, the Chinese were lax on usury and generally had homogeneous currencies..
In Western Europe, any local lord would mint their own coin, as soon as they had the power to do so, Italy had 28 currencies in the High Middle Ages while the single authority that ruled the Kingdom of France used three currencies. Meanwhile, merchants were prevented from charging for the use of money, usury, but they could ask for compensation for risk, interest. The skill came in treading a fine line between usury and interest under the scrutiny of the Catholic Church.
As a consequence medieval finance was not simple, on the contrary, having to deal with uncertainty and a complex regulatory system, it was highly sophisticated. The “modern” financial techniques, such as asset backed securities, collateralisation - “slicing and dicing” - and credit default swaps, were all developed by Europe’s merchants between Charlemagne’s reign and the discovery of North America.
Enlightenment Exchange: forecasting the future
Tim Johnson
1 comment:
Impressive piece by Tim here...
Agree with him here:
" The Financial Crises since 2007 have been less to do with fancy finance backed up by even fancier maths, it was more to do with banks, and their regulators, not keeping an eye on their core business of lending prudentially. It is worth noting that Fred Goodwin at RBS and Andy Horner at HBOS both came from outside banking.
But the facts are dull, it is more interesting, and convenient for many, to talk about the slicing and dicing of loan portfolios as the cause of the Crisis. "
I look at it as key policymakers/regulators were asleep at the switch...
But one thing I would point out, that is a long wave phenom that occurs throughout the history that Tim chronicles here, is the long term cycle in monetary arrangements that have taken place over this same time...
Back throughout the period looks like to the end of Pax Romana, we used 'nomisma' or 'state currency' that received its value 'not by nature but by law' according to Aristotle...
Then we transitioned over to metals. The apparent 'randomness' in economic activity over this long period was probably at core due to the truly random rates at which mass/weight measures of these metals would be happened upon by we humans, and the often chaos process we humans went thru to obtain them...
This lasted right up to very recently with the multi-decade action by FDR-Nixon of going off the metals and back to nomisma. But not many people know about this or what it means (probably only about 1,000 of us on earth right now imo)...
So now, to use some sort of 'statistical modeling' of an economy that is "under law and NOT nature", like we are trying to forecast the weather or something, is NOT applicable or appropriate.
Under nomisma, monitoring our economic operations is NOT like forecasting the weather or trying to predict any other 'natural' process; as we are now back to a system 'NOT of nature but of law'... we can just record the economic activity in our nomisma units in real time and make adjustment to our distribution of nomisma balances under law as we (humans) see fit to optimize our economic performance.
The nomisma balances do not "come from somewhere", the balances are authorized under law (or perhaps 'fiat') via this authority or 'exousia' we humans have been placed under to do this among ourselves, beholden to no other lesser authority or lesser 'exousia' (eg. those represented by the 3 metals that we suffered under for looks like almost 2k years...copper/silver/gold).
"For it is NOT ours to wrestle with blood and flesh, but with the exousias..." Eph 6
So I would like to see "history re-written" sometime with these very critical details about long term changes in our western monetary systems clearly in view...
rsp,
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