Without systems of finance, and particularly compound interest, to discount and spread the costs of long term and long serving capital construction across generations, one would build only to the extent that one could claw the pennies from the groaning peasantry of each generation. The occasional Westminster, but not Manhattan. Compound interest is an essential ingredient in the Industrial Revolution take-off that, for the first time in human history, carried human societies beyond the near-Malthusian equilibrium...
The frightening part, though, is where Anderson notes how ... tempting this idea could be for people who aren't big on economics and/or history:
My underlying reason for raising this article, however, is not merely in order to nominate Flintoff’s column for possibly least economically literate article in the mainstream press this year. (I also apologize for my rather flippant tone if anyone finds it offensive.) It is, rather, that I have this law professor concern that were I to assign this to my business law students - IBT, for example - and ask them to evaluate the arguments, strengths and weaknesses, agree or disagree, a sizable percentage of them would be unable to say (regardless of whether they agreed or not) what the weaknesses of the argument are; they could presumably parrot back its strengths. The number of law students (at my school at least) who are economically literate at the basic level has gone up a lot since I first started teaching in the 1990s, and I think it has gone up drastically at the top level schools ever since they fell out of love with humanities and in love with social statistics - but I would say these days at the mid-tier schools it is a double humped curve - the students who have done some economics know a lot more about the real world of finance and business than they did a decade ago, but there is a big hump of students that don’t know much at all.
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