Book contents
- Frontmatter
- Contents of Volumes I, II, III
- List of contributors
- Editors' preface
- Kenneth J. Arrow
- Contents
- PART I GENERAL EQUILIBRIUM
- 1 A general equilibrium theory of North–South trade
- 2 Soldiers of fortune?
- 3 The dynamics of industrywide learning
- 4 Decentralized trade in a credit economy
- 5 Lump-sum taxes and transfers: public debt in the overlapping-generations model
- 6 Coordination failure under complete markets with applications to effective demand
- PART II MICROFOUNDATIONS OF MACROECONOMICS
- Author index
4 - Decentralized trade in a credit economy
Published online by Cambridge University Press: 25 October 2011
- Frontmatter
- Contents of Volumes I, II, III
- List of contributors
- Editors' preface
- Kenneth J. Arrow
- Contents
- PART I GENERAL EQUILIBRIUM
- 1 A general equilibrium theory of North–South trade
- 2 Soldiers of fortune?
- 3 The dynamics of industrywide learning
- 4 Decentralized trade in a credit economy
- 5 Lump-sum taxes and transfers: public debt in the overlapping-generations model
- 6 Coordination failure under complete markets with applications to effective demand
- PART II MICROFOUNDATIONS OF MACROECONOMICS
- Author index
Summary
The enemy was repelled. But victory was not won. The war dragged on for a year and there was no decision. Gold grew scarce, and again the Government was in despair.
I easily relieved them. “Write,” I said, “promises on paper to be repaid in gold.” They did as I advised – paying me (at my request) a trifle of half a million for the advice. I handled the affair – on a merely nominal profit. I punctually met for another year every note that was paid in. But too many were presented, for the war seemed unending and entered a third year.
Then did I conceive yet another stupendous thing. “Bid them,” said I to the Sultan, “take the notes as money. Cease to repay. Write, not ‘I will on delivery of this paper pay a piece of gold,’ but, ‘this is a piece of gold.’”
He did as I told him. The next day the Vizier came to me with the story of an insolent fellow to whom fifty such notes had been offered as payment for a camel for the war and who had sent back, not a camel, but another piece of paper on which was written “This is a camel.”
“Cut off his head!” said I.
It was done, and the warning sufficed. The paper was taken and the war proceeded.
Hilaire Belloc, The mercy of Allah, 1922- Type
- Chapter
- Information
- Essays in Honor of Kenneth J. Arrow , pp. 105 - 120Publisher: Cambridge University PressPrint publication year: 1986
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