Posted by: Dirk | April 20, 2010

Hoarding in Sweden, 17th century

I spent the easter holidays in Stockholm, Sweden. Visiting the open air museum Skansen on Djurgården, I found this building particularly interesting.

I was probably the only one interested in it, but that’s not the point. The sign next to the building reads:

This storehouse comes from a farm in Värmland. The date of 1694 is carved into one of the beams.

A great deal of work went into establishing stores of food and producing fabrics. Vermin and insects could rapidly destroy both food and clothes. Thus, well-built stores, carefully maintained, were essential for preserving what had been produced.

So, back in the day people saved by hoarding things in a shed. This is not how todays modern capitalist economies work. Savings finance investment via banks, which enables entrepreneurs to exploit increasing returns to scale. Also, the government and households can invest with the long run in mind. Going back to hoarding today would strike us as very strange: building a shed, storing food, clothes and maybe a car. All these items would look old-fashioned when we finally use them in, say, 2055. Therefore, it is essential to make banks work again: on the national scale, but also on the international scale where capital has been flowing uphill for some years.

Alternatively, today’s net-exporting nations (mainly China, Germany, Japan and oil exporters) could build huge sheds (bigger than the one above) and put their surplus produce into these. It wouldn’t be the first time in history …

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