The need for insurance becomes most apparent after a major disaster, so disasters tend to be nurturing of innovation in insurance. London’s Great Fire of 1666 was one such disaster. Not only did the destruction require the rebuilding of much of the city, it also prompted the development and proliferation of fire insurance, hitherto little…
In the absence of metal coins or modern banknotes, commodities have been used as money. The commodities most suitable are those held in high demand by traders and merchants. In colonial America, examples of these included beads, beaver belts, and tobacco. The latter is particularly interesting not only because of its particularly broad acceptance as…
It is easy to think of economic and financial crises that have had stunning political consequences. Sometimes this goes so far as to turn normally arcane fiscal and monetary questions into objects of fierce public debate. The reverse can also happen. Political events can and have changed the context of economic and financial decision-making with…
Trade is capital intensive, even more so when transit times are slower or the distances vaster. Products sitting in warehouses, ships, and ports are deadweight, tying up capital until they are finally sold and used. Merchant banks, as their name implies, serve merchants and for centuries that meant devising a solution to the financial problems…
Any influx of new money, if poorly managed, can prove as ruinous as it seemed alluring. Misdirected riches can be frittered away and, by enabling years or decades of dissipation, growing indebtedness, or both, can leave its former holders in far worse position than where they began. Spain was able to capture large amounts of…
