Prelude to Capitalism and Socialism: The Renaissance, Printing Press, and Double-Entry Bookkeeping

The Renaissance in Western history began in the wake of the Black Death which ravaged Europe in the mid-14th Century (1346–1353). The Black Death sparked the decline of Feudalism, which was originally the Economic system of choice in the West prior to the Renaissance.

But what marked the economic beginnings of Capitalism and Socialism during the Renaissance was when the goldsmith Johannes Gutenberg invented the “Gutenberg Press” or the “Printing Press” in 1440. Given Gutenberg’s profession as a goldsmith (a smith who specializes in the minting of Gold), one should bear in mind that the Printing Press did not just print manuscripts and Bibles. It also had the potential to print paper currencies which became commonplace in later Centuries.

What the Gutenberg Press resembled in the Renaissance

It was also during the 15th Century that Capitalism’s precursor, “Mercantilism,” began to emerge with the ‘rediscovery’ of the Ancient Roman practice of “Double-Entry Bookkeeping.” How the Double-Entry Account Bookkeeping System came into being has often been the subject of Antisemitic accusations predicated on a perceived Jewish ‘obsession’ or ‘fixation’ with Money and Usury through the predatory lending of loans. It is normal to find this accusation perpetuating itself within the Western world for millennia, but we would be very ignorant for assuming that the Jews came up with the accounting system.

In reality, World History itself acknowledges the Ancient Romans as having created the precursor to Double-Entry Bookkeeping, the “Tabulae Rationum,” during the reign of Augustus Caesar in the 1st Century AD.

Prior to the Renaissance, the Tabulae Rationum of Ancient Rome originally began as a propaganda piece by Augustus Caesar to flaunt his Wealth and Power before all the lesser peoples of the Ancient World. When it became apparent that the Tabulae Rationum could actually help him plan for the Empire’s future, Augustus went on to turn the whole concept into a type of financial ledger. An argument can be made that later Roman Caesars also relied on it for their political, religious, economic, military, social and cultural policies. For in 70 AD, Pliny in Elder went on to write about the Tabulae Rationum in Caii Plinii Secundi Historiae Naturalis, Libri XXXVII. He once described how this financial document was formatted in such a matter where “‘on one page all the disbursements are entered, on the other page all the receipts; both pages constitute a whole for each operation of every man.’”

Whether this type of Double-Entry Account Bookkeeping System actually worked for the Romans is still a question of debate among historians. Given the Roman Empire’s recruitment of Germanic mercenaries in its final centuries, an argument can be made that the German word for Money, “Geld,” was introduced to the Proto-Germanic language as ‘Geldą’ (Reward or Gift) by the Romans. The meaning behind this etymology varies from the Romans ‘paying’ Germanic mercenaries with debased Gold coins to the Germanics ‘commanding’ their own to exact revenge against the Romans for enslaving their peoples. But to assume that “Geld” originated from ‘Gold’ is a False Cognate at best, because the Latin word for Gold is ‘Aurum’–its chemical element symbol, ‘AU’, being Atomic Number 79 on the Periodic Table of Elements.

The School of Athens (1509-1511)

Double-Entry Bookkeeping is not only foreign to the Germanic peoples who had conquered the western half of the Roman Empire, but also foreign to all Socialisms. This accounting system was designed by and for Greco-Roman Civilization, which finally met its end in a freak accident at ‘Constantinople’–Istanbul–by the Ottomans in 1453. The notion of minting any Currency backed by Gold and Silver or even Debt–“Bimetallism” and “Chartalism” respectively–is a negative habit which the West had unfortunately picked up from the Ancient Athenian Philosophers Aristotle and Plato. Just as Aristotle had condoned slavery among the Greco-Romans, Plato advocated a different kind of enslavement for the Roman Republic to later emulate–‘Nexum’ (Debt Bondage).

The rediscovery of ‘Double-Entry Account Bookkeeping’, depending on which source that one consults, occurred between the 15th and 16th Centuries. Benedetto Cotrugli of Ragusan (today Dubrovnik, Croatia) wrote the earliest-known example in the Appendix of his 1458 Tradesman Manual, “Della Mercatura e del Mercante Perfetto” (On Commerce and the Perfect Merchantry), which was published a century later in 1573. But World History asserts that the actual rediscovery was in 1494 when a Franciscan Friar and collaborator of Leonardo da Vinci, Fra. Luca Bartolomeo de Pacioli of Florence, published his mathematics textbook, “Summa de Arithmetica, Geometria, Proportioni et Proportionalita” (Summarization of Arithmetic, Geometry, Proportions and Proportionality).

The timing of Fra. de Pacioli’s mathematics book was ominous for Western High Culture because Double-Entry Bookkeeping has not been seen anywhere in Europe since the fall of the Roman Empire over a millennium earlier. This rediscovery was occurring against the backdrop of various events that paved the way for the Enlightenment of the 17th and 18th Centuries. By the 15th Century, Florence, Venice, Avignon and Naples became important cities in the European trade routes to the Middle East along the old Silk Road to China under the Han Dynasty.

The word “Equality” is related to the word “Equity,” which came into being when the Court of Chancery in England and Wales was converted into an ‘Equity Court’ under the infamous House of York and later became overwhelmed by the settling of legal disputes related to “Property-as-Wealth” development, ownership, damages, and compensation in the infamous “War of Roses.”

Meanwhile, the Spanish and Portuguese, searching for a maritime route to China, discovered the Caribbean, the Americas, the Philippines, Taiwan, and Japan. The House of Medici, the infamous banking family of Florence’s Banco dei Medici (Medici Bank), fell in 1494.

In its contemporary form, Liberal Capitalism is dependent on and cannot exist without the “Double-Entry Account Bookkeeping System.” The equation is a simple arithmetic equation with three variables. Below is a table depicting the Double-Entry Bookkeeping equation:

AssetsLiabilities + Equities
Equities = Capital + Revenue – Expenses – Drawings
The equation for Double-Entry Bookkeeping

“Assets” are a “Debit,” which is the sum total of all “Liabilities” and “Equities” as a “Credit.” Credit is what the Borrower is forced to give to the Lender. Debit is what the Lender will receive from the Borrower. Understanding this should be as natural as understanding what are Debit Cards and what are Credit Cards because both Debit Cards and Credit Cards operate within these specific parameters.

A Liability includes and is never limited to: Tax Rates; Insurance Rates; Interest Rates; preexisting Debt accrued from borrowing Money from banks through Credit or Loans; Suppliers of Natural Resources and Raw Materials and those of Commodities and their Distributers; Consensual Contracts; Payments for Leases, Damages, and Lawsuits; Pre-Ordered or Invoiced Payments of Goods and Services on Demand; Wages and Salaries of executives, management, and employees.

An Equity is “Capital” as preexisting Money owned by the Bourgeois businessmen and investors, their “Revenues” generated by day-to-day transactions subtracted from all known operating “Expenses” and any Money that had been removed from the firm by its Owner as “Drawings.” Note that the “Owner” does not necessarily mean employers or executives at the boardroom; anyone and everyone owning any Stock as shareholders is considered an Owner among many.

What enforces this entire process are the Incentives of Supply and Demand.

Categories: Compendium, Economic History

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