1st Edition

Democracy and Money Lessons for Today from Athens in Classical Times

    320 Pages 21 B/W Illustrations
    by Routledge

    320 Pages 21 B/W Illustrations
    by Routledge

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    The authors of this book argue that post-war fiscal and monetary policies in the U.S. are prone to more frequent and more destabilizing domestic and international financial crises. So, in the aftermath of the one that erupted in 2008, they propose that now we are sleepwalking into another, which under the prevailing institutional circumstances could develop into a worldwide financial Armageddon.

    Thinking ahead of such a calamity, this book presents for the first time a model of democratic governance with privately produced money based on the case of Athens in Classical times, and explains why, if it is conceived as a benchmark for reference and adaptation, it may provide an effective way out from the dreadful predicament that state managed fiat money holds for the stability of Western-type democracies and the international financial system.

    As the U.S. today, Athens at that time reached the apex of its military, economic, political, cultural, and scientific influence in the world. But Athens triumphed through different approaches to democracy and fundamentally different fiscal and monetary policies than the U.S. Thus the readers will have the opportunity to learn about these differences and appreciate the potential they offer for confronting the challenges contemporary democracies face under the leadership of the U.S.

    The book will find audiences among academics, university students, and researchers across a wide range of fields and subfields, as well as legislators, fiscal and monetary policy makers, and economic and financial consultants.

    List of Exhibits

    List of Figures

    List of Tables


    Chapter 1: Introduction

    1.1 Deficits and debts in contemporary democracies

    1.2 Complacency and acquiescence of central banks

    1.3 Conclusion

    Chapter 2: Money-related institutions in classical Athens

    2.1 Public governance and Archai in charge of the currency

    2.1.1 Making the best out of the Laurion mines

    2.1.2 Minting of coins and maintaining their integrity

    2.2 Financial intermediation in the private sector

    2.2.1 Trapezai (banks)

    2.2.2 Argyramoiboi or Kollybistai (moneychangers)

    2.2.3 Enechirodanistai (pawnbrokers)

    2.3 Summary

    Chapter 3: The system and the tenets of public finance

    3.1 A brief overview of the fiscal administration

    3.1.1 Setup of the state’s financial services

    3.1.2 Sources and uses of public funds

    3.1.3 Democratic control of financial magistrates

    3.1.4 Balancing the budget through war and peace

    3.2 Public budget and lenders of last resort

    3.3 Summary

    Chapter 4: Main currency-related policies

    4.1. Economics of minting in classical times

    4.1.1. Taxing through reminting

    4.2. Regulatory frameworks of coinage

    4.2.1 Coinage Decree (449 BC)

    4.2.2 The Decree of Kallias (434/3 BC)

    4.2.3 Law of Nicophon (375/4 BC)

    4.2.4 Currency issues in ancient Greek federations

    4.3. Summary

    Chapter 5: Structure and evolution of the economy

    5.1 The state sector

    5.1.1 Governance Civil service Defense and power posture Courts and law enforcement Financial, regulatory and other services

    5.1.2 Infrastructural and cultural facilities

    5.1.3 Social welfare

    5.2 The private sector

    5.2.1 Household production for own-use and sale

    5.2.2 Trade oriented production of goods and services Mining Handicraft and manufacturing Shipping Money and banking Construction Paideia Health care Other public services

    5.2.3 Distribution of goods and services

    5.2.4 Export-import trade

    5.3 Summary

    Chapter 6: Money in a market economy without a central bank

    6.1 Demand and supply of currency and bullion

    6.2 Demand and supply of primary deposits by banks

    6.3 Demand and supply of bank credit

    6.4 Equilibrium in the money market

    6.5 Summary

    Chapter 7: An assessment of comparative performance

    7.1 Price stability

    7.1.1 Inflation in part and in general

    7.1.2 Relative prices and economic flexibility

    7.2 Unemployment

    7.3 Economic growth

    7.4 The interest rate

    7.4.1 Real interest rates in the U.S and ancient Athens

    7.4.2 Public goods and the rate of interest

    7.5 The two currencies from an international perspective

    7.5.1 The U.S. dollar in the postwar period

    7.5.2 The Attic drachma in classical times

    7.6 Summary

    Chapter 8: Alternatives to established central banking

    8.1 Central bank as the fourth power of the state

    8.2 Currency and credit based on free banking

    8.3 Attic drachma: Private currency with state standards

    8.4 On the evolving prospects of electronic money

    8.5 Leads for money from classical Athens

    8.5.1 Central banking with a non-convertible paper currency

    8.5.2 Free banking with commodity-based currencies: The Athenian vs. the Scottish model

    8.5.3 Free banking with digital currencies

    8.6 Concluding assessments

    8.7 Appendix: On the inversion of Gresham’s law in classical Athens

    Chapter 9: Why back and how to direct democracy

    9.1 Core weaknesses of contemporary democracy

    9.1.1 The self-interest of politicians

    9.1.2 Bureaucracy

    9.1.3 Uncoordinated administrative polycentrism

    9.1.4 Rent-seeking

    9.1.5 Regulatory and state capture

    9.2 Sources of inherent weaknesses in contemporary democracy

    9.2.1 Impossibility of representation in groups

    9.2.2 Asymmetry of information

    9.2.3 The deleterious role of political parties

    9.2.4 Deficit spending

    9.3 The superior advantages of direct democracy

    9.3.1 No representation, no political parties, no voter alienation

    9.3.2 Procedural counterbalancing of informational asymmetries

    9.3.3 Election, accountability and personal responsibility of all officials

    9.3.4 Resiliency through multiple checks and balances

    9.4 The long march back to citizen sovereignty

    9.4.1 Gradualist pathways to substantive democracy

    9.4.2 Radical return to direct democracy

    9.5 Summary and concluding remarks


    Ancient Greek authors

    More recent literature

    Contemporary literature in Greek

    Index of Subjects

    Glossary of Greek terms


    George C. Bitros is Professor of Political Economy, Emeritus, Athens University of Economics and Business.

    Emmanouil M.L. Economou is Adjunct Lecturer at the Department of Economics, University of Thessaly.

    Nicholas C. Kyriazis is Professor at the Department of Economics, University of Thessaly.

    'The book explains how the main political institutions (mainly the Assembly of the citizens and the Council) were functioning regarding monetary matters. It explains the Athenian monetary system as a benchmark for reference and adaptation, which would provide an effective way out of the current dreadful predicament that government managed money holds for the US and the world at large.

    The authors argue in favor of the imperative that representative democracy in the U.S should be transformed into digital direct democracy, i.e. go back to the form of the Athenian democracy that the American founding fathers would have wished to introduce, but has become feasible, if not inescapable, only in our times by the ongoing revolutionary advances particularly in the fronts of digital technology and cryptography.' — Professor Panagiotis E. Petrakis, Department of Economics, National and Kapodistrian University of Athens, Greece. 

    'Following an interdisciplinary approach, combining economics, history and political science, the authors address a variety of issues, such as: money related institutions in Classical Athens, public finance, the various coinage decrees, currency issues in ancient Greek federal states, structure and evolution of the economy (in which they show that Athens may be considered the first "modern economy"), alternatives to established central banking, examining modern issues of monetary policies and some of its failures and comparing them to Athens.

    It is an interesting, challenging and well-argued book that should interest economists, political scientists, historians but also the general public.' — Professor Napoleon Maravegias, School of Economics and Political Sciences, National and Kapodistrian University of Athens, Greece.

    "This book is a comprehensive, useful and timely collection of what we know today of the Athenian economy, which provides challenging arguments on how we might use the wisdom thus gained for future reforms. The combination of different disciplines, the wealth of information provided, the bold policy proposals are remarkable and represent a singular achievement." — Bertram Schefold, Faculty of Economics, Goethe University.