September 21, 2011
The Bank of England
Coinage is invented to pay soldiers, and markets that used them tended to crop up alongside military camps. Similarly the modern banking system arises to help fund European wars. Central banks, in turn, institutionalized that system, since the debts they manage are basically government war debt, and always have been—at least back to 1694, when King William II offered some London merchants who’d made a loan of £1.2 million to fight a war in France the right to call themselves “The Bank of England” and loan that money he owed them to others in the form of banknotes, thus bringing our current currency system into existence. Modern money is still basically government war debt.David Graeber interviewed at Infoshop News.