For the greater part of recorded history the most successful and powerful states were autocracies; yet now the world is increasingly dominated by democracies. In A Free Nation Deep in Debt, James Macdonald provides a novel answer for how and why this political transformation occurred. The pressures of war finance led ancient states to store up treasure; and treasure accumulation invariably favored autocratic states. But when the art of public borrowing was developed by the city-states of medieval Italy as a democratic alternative to the treasure chest, the balance of power tipped. From that point on, the pressures of war favored states with the greatest public creditworthiness; and the most creditworthy states were invariably those in which the people who provided the money also controlled the government. Democracy had found a secret weapon and the era of the citizen creditor was born. Macdonald unfolds this tale in a sweeping history that starts in biblical times, passes via medieval Italy to the wars and revolutions of the seventeenth and eighteenth centuries, and ends with the great bond drives that financed the two world wars.
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The Relationship of Public Finance and Political Freedom “A Free Nation Deep in Debt” is James Macdonald’s first literary contribution to the field of political economy and it is rich in historical detail, a fact which may make it a challenging read for anyone unacquainted with ordinary economic history and its specific historiography. Macdonald, an investment banker for many years who now lives in Oxford, England, discusses the idea that the way a country borrows its money is associated with what kind of government it has. In his…
An excellent history of public debt and its role in developi This book is not what you think. The title suggests the repeat of the theme exposed by Paul Kennedy in the 80s in his book “The Rise and Fall of Great Powers.” But, the two books advance almost symmetrically opposed theories. Paul Kennedy suggested that great powers eventually decline because they can’t withstand the fiscal burden of maintaining a nonproductive military effort to govern their empire (the Imperial Overstretch concept). Macdonald instead advances that a public bond market is…
Well argued even if you don’t agree with him For the record, I won’t pretend to be an expert on public debt and all its related trivia so I’ll judge this book as a layman only.A Free Nation Debt in Debt is an impressive bit of research and analysis. Macdonald does a remarkable job tracing the role of public debt stretching back thousands of years in an attempt to advance the notion that democracies are inextricably tied to government funding, and indeed exist because of it. Throughout history, Macdonald argues, public debt has…