ECON316

creation of new inanimate sources of power. creation of machines as a substitute for human skill. greater access improvement in the working of raw materials

1. goods-goods relationship
2. individuals operate on basis of individual gain.
3. discrete, finite, closed.
4. private properties are closed.

- Goods move between partners of roughly equal social statuses
– between clan members
- System w/o holes. Worst punishment is to become an outcast, hard to be an individual.
- Therefore no goods for goods, no limit to give away. Aren’t discrete one-time relationships, these are cradle-grave relationships, and no private property.

- Goods are produced through activity: hunting, fishing, etc
- Collected in central location
- Then Redistributed based on social status: Chief Elders  Warriors
- Any society with central power has redistributive pattern

1. No evidence of money/ no goods-goods relationship. What you get back is based on social status.
2. Quantity is known, can’t hide any parts.
3. Not discrete, can’t be chief one year, then give to other chief next year.
4. No private ownership.

Every country participating had to set a value of 1 unit of national currency equal to a physical unchanging weight of gold.

The 2nd rule was that the domestic monetary authority of each country was required to buy and sell gold at that stated price.

The countries would Increase the Re-discount rate, Increase the interest rate, charge borrowers, put increased pressure on domestic interest rates. This would lead to an increase of demand for financial instruments/capital inflow, which would lead to a gold inflow.