Kim Bowes: evaluation

Transcript context

…Why was there so much decentralized money lending? You would think that banks would have economies of scale, offer better terms, just like I wouldn’t borrow money from my friends, I would go to the bank. Why doesn’t the Roman Empire evolve that way? The Roman Empire confuses us, I think, because on the one hand, it looks like a really big state that ought to do things that big states do. The Roman big state is really a mask for an empire of friends and family. You borrow money from friends and family. Banks, such as they exist, are really nothing more than friends and family, so even when you have actual banks, they tend to be largely constituted by a single family. The difference that you’re making between borrowing from a bank and borrowing from your family is much less clear-cut in a world in which the bank is your family, or the bank is a family that is friends of yours. It’s not that Romans don’t use banks, they do use banks. We can see the most often wealthier Romans using banks. It’s a lot harder to see the 90 percent using banks, and they seem to more often default to the immediate circle of people that they know, which again, it’s not such a huge distinction. In a world in which there’s no FDIC, in which the bank isn’t guaranteed and protected by the state in the way in which our banks are, the distinction between bank and family, bank and friends, is much less clear. Still, in Renaissance Europe, there are plenty of banks which are large. They might be family-based, such as in Florence, but they still were proper commercial banks. Is it the case Rome had these incredible roads, aqueducts, a whole system of empire, but didn’t have ordinary banks for the 90 percent?…

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