Economics Questions

Re: King Solomon

vive la insurrection — Tue, 09 Aug 2011 23:07:32 GMT

My original question is that by increasing the silver supply King Solomon was making the shekel close to worthless.

1) I think it really depends on what is being said. I don't feel like pulling out my resources on Greek (and I know little of Hebrew / Aramaic, so if it an Aramaic phrase that would make it even more difficult) to know what is meant by "increasing silver". If it is more or less a phrase that was traditionally meant to mean "the inhabitants of the kingdom were prosperous(as silver was very much a prestige item)" than that is all we can look at and read into it, I would also likely consider that to be the best way to intepret the phrase - as it wasn't meant as a scientific proposition but a way to describe what was going on in Israel at the time.

The best way to refute it that I can think of would be by saying the Kingdom split due to heavy taxation at the time...but I think that is made clear due to unprecedented expensive building projects than showing a major devaluiing of currency.

2) I don't know how to make the claim that Solomon could inflate silver, nor do I know how silver could be inflated in this period. So far as I can discern, this was one of the "better times to be in the East Med / Near East. There were no "major" empires and wars and trade seemed to be booming. Solomon's silver was tied to Phoenician trading and colonization (and as I pointed out earlier maybe Hellenistic mining), as the Phoenician's were expanding westward, specifically for the silver trade. In fact before the 10th century, there is 0 indication that silver (or any metal) was circulating at any considerable level. This was an unprecedented era of trade, and perhaps the 1st time in history we had anthing of an international standard, and comming out of the "barter system" of old and into something close to actual "money".

So when "silver was increasing", we are looking at maybe for the 1st time civilizations reorginizing the way they thought and handled trade. Also, and very important - it is tough to date if silver would be the "de facto" currency at this period or a little later - perhaps silver was just the hallmark for saying "prestige object" rather than currency.

There is no evidence of inflation in this period of the Hellenistic city - states, Assyria, and Tyre (I can't comment on Egypt, Anatolia/Hittites or the Iranians at this point). In fact this seemed to be a long era of relative prosperity. There are a couple of Assyrian examples of note, but they are a few centuries later. And it can be stated with some certainty it isn't until the reign of Asurbanipal that inflation starts to kick in due to the increase of silver supplies.

Re: King Solomon

Antagonist — Tue, 09 Aug 2011 23:05:01 GMT

It seems that the additional gold was real wealth added to society. Opposed to our current situation, where we have false wealth being created through the printing of money.

Re: King Solomon

Smiling Dave — Tue, 09 Aug 2011 22:20:56 GMT

vive,

All very true, but let's say Obama did all that King Solomon did for the US economy. He dies and is eulogized for all those accomplishments, and also for making the US dollar close to worthless.

My original question is that by increasing the silver supply King Solomon was making the shekel close to worthless.

Would like a solid answer.

Re: King Solomon

vive la insurrection — Tue, 09 Aug 2011 22:08:19 GMT

Also, and I don't think anyone mentioned the most "obvious" answer. It is tradition to think of Solomon as opening up a lot of trading routes, working with Tyre, and over all turning Israel into a more peaceful commercial kingdom than it had ever been in previous generations. So throw that out there just to make sure everyone realizes that.

Re: King Solomon

Aristippus — Mon, 08 Aug 2011 08:40:11 GMT

Everyone would be covered in gold and silver jewellery. Looks a lot better than regular stones.

Re: King Solomon

Matticus Rex — Mon, 08 Aug 2011 07:56:21 GMT

Smiling Dave:

Just thought of another answer. He didn't coin all of it, and didn't allow others to either.

EDIT: not sure that would help.

Irrelevant. Bullion is just as easily traded against coinage.

Re: King Solomon

Smiling Dave — Mon, 08 Aug 2011 05:37:35 GMT

Just thought of another answer. He didn't coin all of it, and didn't allow others to either.

EDIT: not sure that would help.

Re: King Solomon

Clayton — Sun, 07 Aug 2011 23:35:40 GMT

Mormons now?

Re: King Solomon

Lord Edward Coke — Sun, 07 Aug 2011 17:28:43 GMT

Afraid not. Solomon Had Global commerce that streached unto the americas. They even planted thier law here>

http://economics.sbs.ohio-state.edu/jhm/arch/loslunas.html

In I Kings 10.14:

Now the weight of gold that came to Solomon in one year was six hundred threescore and six talents of gold.

This is a direct reference that shows the theft, that is taxes, is irretrievably married to the beast system.

Exd 20:15

Thou shalt not steal.

But God warns us to ''be ye seperate'' and come out of this world scheme.

Rev 18:4

And I heard another voice from heaven, saying, Come out of her, my people, that ye be not partakers of her sins, and that ye receive not of her plagues.

Re: King Solomon

vive la insurrection — Fri, 05 Aug 2011 06:34:57 GMT

1) Their greaest trading partner at the time was Tyre, which was the commercial capital of the world at the time, and this may have been about the height of their prosperity. Tyre was essentially what put "the world" on a silver standard. This could have increased the wealth in the region (and hence silver).

2) This was towards the end of the Hellenistic "dark age", so depending on how you want to read that (the later half may have been an economic boom), there may have been an increase in silver mining at this time. I have no clue on that though.

3) Solomon did seem to get in trouble with taxes, which eventually split the kingdom - so there is that

4) Even in the Fertile Crecent era at this time, it is very hard to come up with "the true" narrative from scratch (what ever the hell that means).

I think there is a real danger with "history as science", or "history in a void" approach (such as in the past denying Babylon or Troy's existance, by people who have been divorced/ never were really apart of the culture or history - even though every "siti" in Anatolia knew where Troy was ), is usually not a productive way to think about things, and I usually think there is a dubious motive behind such approaches... this compounds itself even more when considering our main text at hand.

I think he geneology of this mindset has it's roots in Hegelian German Bible criticism, which was faulty to begin with and hasn't gone out of fashion yet, Either way, don't be surprised if some old half-educated Hellenistic or Iranian dude has better access to telling you about Alexander the Great than many Western educated scholars will. Not to reproach an entire field, there is great scholorship out there, and it's better to ask these questions and think critically about such matters than not ask or think at all, but still.

Re: King Solomon

Smiling Dave — Fri, 05 Aug 2011 06:12:27 GMT

Makes sense, that it depends on the regional supply, if we are talking about plenty of regional trade.

Didn't know about Gary North.

Re: King Solomon

Matticus Rex — Fri, 05 Aug 2011 05:52:03 GMT

Smiling Dave:

I think so. After all, the supply of money is higher, decreasing its price, i.e. its purchasing power.

Look at Spain in the 1500s. They got their gold and silver for free, without having to give away anything in exchange in trade, and still they had inflation.

From wikipedia:

Historically, infusions of gold or silver into an economy also led to inflation. From the second half of the 15th century to the first half of the 17th, Western Europe experienced a major inflationary cycle referred to as the "price revolution",^[16]^[17] with prices on average rising perhaps sixfold over 150 years. This was largely caused by the sudden influx of gold and silver from the New World into Habsburg Spain.^[18] The silver spread throughout a previously cash starved Europe and caused widespread inflation

[disclosure: np]

Not so fast. If the money was gained by trade, then the Israelites had to produce goods and sell them to others to get that money. If they were innovative in their production methods or were rich in natural resources, this could easily lead to a non-inflationary accumulation of gold and silver. Hebrew society has traditionally been a society of savings and capital accumulation, so such a result is plausible.

The ostensible difference between this situation and that of Spain is precisely the transfer of goods rather than the lack thereof. If I have 100 barrels of olives and trade them for 100oz of silver when the barrels of olives had a total cost to me of 20oz of silver, this could easily lead to wealth accumulation in the short term. If there are 10,000oz of silver in the regional market (just for arguments' sake) and the supply of money does not change, each transaction makes me relatively wealthier. If, however, as in the case of Spain, there are (again, for arguments' sake) 10,000oz of money in the regional market, and without any change in production, 10,000oz more are brought in from the New World, each ounce of silver decreases in worth by half. One is inflationary, the other is not. I don't think the passage is suggesting that Solomon just mined all the silver and gold, so the accumulation there would be non-inflationary.

Have you checked if Gary North says anything about this passage in his economic commentaries on the Bible?

Re: King Solomon

Matticus Rex — Fri, 05 Aug 2011 05:51:56 GMT

Smiling Dave:

I think so. After all, the supply of money is higher, decreasing its price, i.e. its purchasing power.

Look at Spain in the 1500s. They got their gold and silver for free, without having to give away anything in exchange in trade, and still they had inflation.

From wikipedia:

Historically, infusions of gold or silver into an economy also led to inflation. From the second half of the 15th century to the first half of the 17th, Western Europe experienced a major inflationary cycle referred to as the "price revolution",^[16]^[17] with prices on average rising perhaps sixfold over 150 years. This was largely caused by the sudden influx of gold and silver from the New World into Habsburg Spain.^[18] The silver spread throughout a previously cash starved Europe and caused widespread inflation

[disclosure: np]

Have you checked if Gary North says anything about this passage in his economic commentaries on the Bible?

Re: King Solomon

Smiling Dave — Fri, 05 Aug 2011 04:45:45 GMT

How would the Judaic diaspora in Babylon be crucially united by a story of what happened 500 years before?

Do you feel more united with, say, texas or canada or mexico, or anywhere, at all by anything that happened in 1500?

As a member of the American elite, are you impressed by any story any country tells you about what happened to it 500 years ago?

Re: King Solomon

Clayton — Fri, 05 Aug 2011 04:37:25 GMT

The Biblical accounts of Solomon are surely greatly exaggerated in every respect. The accounts themselves were probably not written until the time of the Babylonian captivity (at the earliest) and were likely a crucial piece of propaganda for uniting the Judaic diaspora in Babylon as well as for impressing the Babylonian elites.

Clayton -