Although 1720 is not generally viewed as a period of technological novelty, we argue in this paper that there were at least three critical innovations that took place in a very short span of time; two of which were financial innovations, the other was a major potential shift in the configuration of global trade. The first innovation was financial engineering at a national scale. The Mississippi Company and the South Sea Company issued equity shares in exchange for government debt; in effect converting the national debt into corporate stock. …These do seem like indisputably valuable innovations in the long-run (like, say, ATMs, as opposed to securitization).
The second innovation was an incipient shift in global trade. Both of the companies were set up to exploit trade in the Americas. … The third innovation was also financial. The first publicly traded insurance corporations were chartered in Great Britain 1720, as a result of the Act. As such, they represented a new model of capital formation for maritime insurance firms – in a nation built on maritime trade.
(or has securitization just passed through its initial collapse, preceding a long and fruitful contribution to human economic activity?)
I would be interested to see similarly far-reaching historical analysis on commodity cycles. I have the impression that real commodity prices have fallen throughout human history, but I lack the facts to back it up.
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