In the year 600 B.C., the civilisation of Athens was in a state of decay.
Rampant greed and power-mongering were commonplace, tearing great rends throughout the economic and moral fibre of society. And corruption was so rife, that it had almost become expected of the political ruling class of society as a tool of governance.
The common people of Athens didn’t fare well during this time. The population was kept in line mostly through fear, with regular executions being the favoured tool of guaranteeing compliance—a punishment that was sometimes dished out for offences as trifling as cabbage theft.
Throughout history, whenever a society was experiencing such a rampant level of rot, it often led to an economic chasm between the rich and the poor. And for Athens, this fact definitely held true.
Farming was by far the most important industry in ancient Athens, with almost eighty per cent of society somehow being involved in the production of food. The remainder of the population was comprised of the Athenian privileged class, which was mostly represented by merchants, bankers, politicians, and scholars.
Everyday poverty meant that many farmers barely had the capital to afford yearly expenditures like seed stock, or animal feed, and so tended to take out hefty loans from the wealthy elite of the nation to fund their activities. However, there were many potentially unseen factors that could lead to a farmer being unable to pay his debt; for example, a season of bad weather causing poor crop yields.
Athenian law was such that if a debtor defaulted on their loans, a creditor could seize any lands they may have owned, and enslave them as a means of repayment. A brutally harsh punishment that further accentuated the divide between the classes in society.
Many of these cruel laws were implemented by Athens’ previous legislator Draco, and were considered abhorrent by most of this culture that traditionally championed the merits of an equal society. And so sometime around 510 B.C., the city-state’s next lawmaker Solon decided to address the problem of inequality, by removing many of his predecessor’s regulations.
But Solon faced a problem. To risk making society too equal would be to lose the approval of the nation’s ruling class. And so, he attempted a legal balancing act that he believed would garner approval by all echelons of Athenian society.
He first freed the debt slaves who were not able to pay their wealthy creditors, in order to appease the farming class. But he also decreed that the creditors were able to keep any land they had previously confiscated, as a way of making good on debts they were owed. And to sweeten the deal, he also gave the elite more of a say in the political decisions of Athens as a whole.
In the eyes of Solon, these were compromises that would grant him favour with both the rich and the poor of the land. But time would soon show that his attempted economic cure would have about as much of a healing effect as putting a dirty rag on a festering wound.
Within years, Athens’ prosperity divide had become even more pronounced.
The wealthy now owned more of the land, and much of the poor farming class no longer possessed a piece of earth on which they could earn a living. Sure, they weren’t literal slaves anymore, but they were now economic slaves in the sense that they needed to rent land from the richest people in society just to grow food—land they once owned themselves.
Solon had done nothing but provide a temporary solution to a problem that would go on to fester into something worse.
However, Solon wasn’t a complete failure. He did manage to increase Athens’ trade with the outside world, and would go on to be known as one of history’s most instrumental figures responsible for the creation of democracy as we know it today. But his success in addressing inequality remains one of many scars that mark his legacy.
Two and a half millennia later, it seems as if we’ve learned nothing from Solon’s attempts to address wealth inequality.
It’s no secret that everything around us has become ridiculously more expensive of late.
In Iceland where I live, petrol and diesel are now almost $1 USD per litre more expensive than they were just a year ago. And during that period of time, the same model of Jeep Wrangler I purchased here in April of 2021 is now selling for nearly 3 million ISK (approximately $23,000 USD) more than when I acquired mine.
This is inflation in action. And more than likely, you’ve experienced some of the same outrageous price hikes in your own home country.
Of course, this has all come as a result of the ‘VID-demic that began to grip our planet a little over two years ago. And the direct result of an insane amount of money printing that’s happened since then, that was designed to relieve the stress of a stagnating economy.
Anyone familiar with economic stagnation will know that any time the government money printer goes brrrrrr, it does temporarily stabilise the landscape. As more money is pumped into the system, or given out to fatten the bank accounts of individuals via a stimulus package, causes the desired financial flow.
Flow is good. Torpor is not.
But this is just a band-aid. Inevitably, all the additional money that’s entered the system leads to the problem of inflation. And unfortunately for us plebs, those who are writing the rules of inflation don’t really seem to see the significance of this problem.
Kjerstin Braathen, for example, is the CEO of DNB ASA; Norway’s largest financial services group. And just last week she spoke at The World Economic Forum’s meeting in Davos, about the financial hardship humanity will be required to endure over the coming years.
She spoke about how current economic challenges and energy shortages will create further “inflationary pressures”, and that the pain of higher inflation will be “worth it” in the long run. What she didn’t mention, however, is that she won’t suffer from the effects of inflation anything like the average person will, due to the fact she brings home a salary of almost $9 million USD per year, while also owning tens of millions of dollars worth of assets.
This should show you how far removed the economic masters of our planet are from living with the consequences of the economic situations they are primarily responsible for creating.
But worse than just palming off the effects of inflation, in my humble opinion, are the leaders who blame others for creating the issues that arise from it. Most specifically, the problem of wealth inequality.
Both the leaders of the United States and Canada—Joe Biden and Justin Trudeau—have blamed the wealthiest people and companies in society for the fact that their nations are experiencing an Athenian level of wealth inequality. According to their words, it’s simply “not fair” that some in society are hoarding more than they need, while leaving less for everyone else.
Instead of pointing fingers, however, they should be directing these criticisms at their own reflections. Because it’s by excessively printing their own nation’s currencies, that they’re the ones heaping a pile of economic excrement on the poor.
For most of the poor in society, the only asset they own is cash; either a small amount of it in a bank account, or whatever their salary provides. And the worse inflation becomes, the more value it strips from these savings and earnings, by making goods and services in society more expensive.
But this is a severe contrast to how the wealthy experience things. For them, inflation is mostly a godsend.
While inflation gradually increases the cost of goods and services, it also drives up the value of certain assets. And as the upper echelons of our society own most of the assets—things like land, houses, stocks, commodities, and even valuable collectibles like art—it’s an obvious eventuality that this also leads to a swelling of their wealth.
It’s almost exactly what the people of Athens suffered. A momentary easing of one problem, eventually leading to most of society being further plunged into a pit of economic hopelessness.
But here’s the thing: our modern situation is likely only hopeless if you solely rely on cash.
If inflation continues to rise—which I and many others expect it to do in the near future—it could be worth your time to consider other vessels in which to store and grow your wealth. The most obvious beneficiaries so far have been real estate, as well as food and energy commodities like oil, natural gas, wheat, and coffee.
Sure, you might not be in the position to dump some cash into a property right now. But there’s no excuse for not having the capital to put a percentage of your income into certain commodities, which can be bought into or traded with as little as a few measly bucks.
And sure, the best time to have thought about doing this was probably two years ago, when the first signs of the coming economic storm were showing themselves in early 2020. But can you guess when the second-best time to do this might be?
If you don’t have much faith in the economic competence of your leaders, that time is probably now.
Solon failed to create a better future for the people of his time. But at least you have the ability to create a better one for yourself.
Leon Hill.
Co-founder, Abundantia.
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Rampant inflation will continue to widen the wealth gap. And it's likely only going to get worse over the coming months.
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Bro
I gotta print these letters on paper cuz they are awesome!
All money is created digitally by private bank lending. Banks create new, digital money to lend AFTER the borrower signs the loan contract. Banks create new, digital money with no need for prior deposits or reserves. Richard Werner proved this empirically in 2014. In that same year the Bank of England admitted the same thing in their paper, "Money Creation in the Modern Economy."
Your entire premise of "Government prints money" is wrong. In fact, government gets all revenue from taxation and borrowing. But the money being used by government is always created by private banks. And since inflation is caused by too much money creation, it follows that PRIVATE BANK LENDING is responsible for inflation, not imaginary "Government Money Printing."
Proofs available at: bankLIESdotORG