This magisterial history of European debt offers a unique perspective on the eurozone crisis. It begins in ancient Greece and continues all the way to speculations about Europe’s financial future. Dyson finds continuities across the millennia. Economic interdependence has meant that creditors have always had more bargaining power than debtors, a fact that is encoded in economic institutions and ideas; historically, debtors have had to accede to creditors’ demands. The willingness of states to incur debt nonetheless typically results from pressing priorities such as war, reconstruction, or demands for social welfare. Yet the most interesting constants throughout European financial history are the pervasive illusions and misunderstandings that befall every generation. Over and over again, market participants and observers mislead themselves into believing that they fully understand the true nature of credit and debt and mistake the parochial positions they take as creditors or debtors for moral standards. The resulting hubris and self-delusion often wreak havoc, particularly for the economically disadvantaged.
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