In Arrighi's The Long Twentieth Century, the features that
allowed the capitalist state, as pioneered by fifteenth century Venice and Genoa,
to grow out of and transform medieval Europe read like the elements of a
playbook still in use today:
1) Profits determine all. Apply cost-benefit analysis to all uses of state power, which is deployed to serve the financial interests that control the state.
2) Increase banking profits by delaying the settlement of debts, expanding the amount of credit issued by making deferred repayments overlap one another, a system which collapses if all accounts are cleared simultaneously. When periodic financial crises force counter parties to clear accounts simultaneously, shift the losses onto clients and competitors.
3) Use sound money as a store of value to reliably measure profits and losses from far flung deals, and profit from the monetary ignorance of trading and financial partners who use less stable currencies that vary in value geographically and over time.
4) Create a central bank for the control of public finances by private creditors. Inflate the pubic debt to strengthen the hand of creditors and progressively empower the central bank to take over the administration of government revenues for the benefit of financial interests.
5) Protect financial interests by limiting the amount the state spends on warfare. Maintain a balance of power among rivals and manipulate it in your favour, for example by having other states fight your wars for you for as little financial cost to yourself.
6) Run an extensive diplomatic and espionage network to gather intelligence about the ambitions and capabilities of rivals in order to manipulate the balance of power, reduce the amount spent on warfare and increase the military costs borne by others.
7) When conflict is necessary generate revenues from wars to make them pay for themselves. For example, through having military spending boost the incomes of citizens, thereby increasing tax revenues and the capacity of the state to finance more military expenditure.
1) Profits determine all. Apply cost-benefit analysis to all uses of state power, which is deployed to serve the financial interests that control the state.
2) Increase banking profits by delaying the settlement of debts, expanding the amount of credit issued by making deferred repayments overlap one another, a system which collapses if all accounts are cleared simultaneously. When periodic financial crises force counter parties to clear accounts simultaneously, shift the losses onto clients and competitors.
3) Use sound money as a store of value to reliably measure profits and losses from far flung deals, and profit from the monetary ignorance of trading and financial partners who use less stable currencies that vary in value geographically and over time.
4) Create a central bank for the control of public finances by private creditors. Inflate the pubic debt to strengthen the hand of creditors and progressively empower the central bank to take over the administration of government revenues for the benefit of financial interests.
5) Protect financial interests by limiting the amount the state spends on warfare. Maintain a balance of power among rivals and manipulate it in your favour, for example by having other states fight your wars for you for as little financial cost to yourself.
6) Run an extensive diplomatic and espionage network to gather intelligence about the ambitions and capabilities of rivals in order to manipulate the balance of power, reduce the amount spent on warfare and increase the military costs borne by others.
7) When conflict is necessary generate revenues from wars to make them pay for themselves. For example, through having military spending boost the incomes of citizens, thereby increasing tax revenues and the capacity of the state to finance more military expenditure.
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