Augmented by contracts permitting the enslavement of insiders’ wives and children, and their relative’s services as hostages, these governance mechanisms prevented insider fraud and propelled the banks to empire-wide dominance.
That's from Randy Morck and Fan Yang; there is more here.
Speaking of contractual enslavement, inquiring minds want to know TC’s opinion of Bryan Caplan’s recent forays into the law of coverture. Crooked Timber has been all over this, but Marginal Revolution is not usually slow to comment on Prof. Caplan’s work.
This was a state that was based on an ideology, Conficianism, that argued that it was wrong to tax mercantile transactions because gaining revenue from such transactions would encourage the government to encourage trade. Trade and all mercantile activity were seen as so deeply and inherently evil that increasing state revenues was secondary to suppressing them.
Cool, I had Randall Morck as a prof for finance class when I was an undergrad. Fantastic prof.
This sounds a bit like the practice of sankin kotai in samurai-era Japan. The first sons of regional governers were involuntary “guests” of the emperor, so as to ensure a steady stream of revenues from the provinces.
A modern update given the progress in medical science would be to allow organ removal for transplant to settle losses bankers cause depositors and investors.
Oh, wait, I think China already has that policy; execution for violations of fair business practices, and organ donations from those executed.
I’m pretty shocked that noone has thought of mock executions for bankers.
Or, how ’bout we find some guy who lost a fortune. Rather than just throwing his life away on suicide, we could take care of his family if he agreed to go by public firing squad.
As they say, you’d only have to shoot one.
The 11th edition of the Encyclopedia Brittanica (1910) contains a paragraph somewhere about a Chinese court official whose career got off to a good start. But then, it says, “his poetry fell into disfavor, and he was chopped into small pieces.”
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