Yes, it looks like you’re right that there were significant investment opportunities even with BC technology, unlike what I assumed. We can quibble over whether these investment opportunities were “deep” or one-offs, but it seems reasonable that irrigating farms is something you can invest a lot in before hitting diminishing returns.
This is still a strange phenomenon: on one hand you have potential investments with high rates of return, even with risk adjustments—yet market interest rates were very high, showing few people were willing to make those investments. Clark’s argument is that this demonstrates low ability to delay gratification among the ancients.
This being the case, although there evidently were opportunities for loans to be put to good investment purposes, it looks like there was a strong psychological impulse to blow it on consumption—maybe comparable to the behavior of the Western poor today. It is still plausible that restricting moneylending was good policy if the good borrowing:bad borrowing ratio was unfavorable enough.
Yes, it looks like you’re right that there were significant investment opportunities even with BC technology, unlike what I assumed. We can quibble over whether these investment opportunities were “deep” or one-offs, but it seems reasonable that irrigating farms is something you can invest a lot in before hitting diminishing returns.
This is still a strange phenomenon: on one hand you have potential investments with high rates of return, even with risk adjustments—yet market interest rates were very high, showing few people were willing to make those investments. Clark’s argument is that this demonstrates low ability to delay gratification among the ancients.
This being the case, although there evidently were opportunities for loans to be put to good investment purposes, it looks like there was a strong psychological impulse to blow it on consumption—maybe comparable to the behavior of the Western poor today. It is still plausible that restricting moneylending was good policy if the good borrowing:bad borrowing ratio was unfavorable enough.