It's common for plant farmers in smaller countries too. I interviewed at a company that wanted to help banks lend to tiny farmers who have to borrow against future harvests to afford fertilizer / seed / equipment maintenance for the season ahead. Since many of these small farmers are geographically and technologically a long way off from where the banks are at, they don't get great rates because the banks (currently) don't have great tools for assessing the risk of any particular family farm.

This is how debt peons are made, historically. Kinda sad to see the same patterns in the modern world.

The same pattern is the FOUNDATION of the modern world!

The beauty of the current system is that because everyone has been told they are free, it is their own fault when they get trapped in a debt cycle.

Thus their own moral sense is the jailor.

Getting a bad rate doesn't mean you also accept it.

Having only cheese to create leverage limits your options

Sounded to me like they didn't even have the milk, and like they're in rural areas of developing nations.

Isn’t this the classic use case for debt? Upfront funding to fund an investment?

Hmmm... It's a two party system right? Borrow and lend. Your example is the borrower's half. The lender [supposedly] assumes risk, and presumes the money could be invested in other profitable ventures (opportunity cost), therefore they charge the borrower interest - I think the paradigm goes something like that... Viola double coincidence of needs, deal accepted.

If the farmer has a shit year, the lender has a variety of options for recourse. Including dispossessing the farmer of land. Historically there were other options like selling one's family. You could castrate yourself and hope to God you'll be accepted into court. Debtor's prison I imagine is also a probable consequence. This is doubly offensive when we consider interest, which can often result in multiples of the initial investment, and that many large scale first world lenders have developed world and the IMF backing them basically indicating they're not allowed default.

Hard to say with the information provided, but it seems typical of the trend.

... which incidentally is the origin of the Commodity Market.

You can borrow against most assets you own. Margin in your stock account, a mortgage or HELOC, etc. Credit cards are essentially based on your ability to repay much like borrowing against your future cheese revenue.

Modern finance and accounting more-or-less started in Renaissance Italy. Double-entry bookkeeping meant merchants and bankers kept good books. Good books and good accounting made negotiable instruments like bills of exchange (e.g. checks) and letters of credit reliable--at least when drawn on or issued by Italian banks and their partners around the continent--which meant travelers and traders didn't need to carry alot of currency or gold (dangerous), or resort to barter. Negotiable instruments in turn built up foreign exchange markets. Foreign exchange markets grew foreign financing. Larger, more liquid financing markets meant it became easier to borrow against assets (i.e. security). And on and on.

Much of modern transactional banking and securities law became settled during that period, eventually becoming nearly universal across disparate legal regimes around the world.

Sounds interesting. I never would have assumed double-entry bookkeeping went back that far. Any good book suggestions?

I enjoyed reading The Verge by P. Wyman https://www.amazon.com/Verge-Reformation-Renaissance-Forty-Y...

It describes changes that happened in war, mining, shipping, trade in (mostly western) Europe in the last decades of XV century. The common theme is finance and it includes a chapter on how bank houses became bigger and could secure much bigger loans (which allowed bigger states to wage wars, or rich individuals to bid for top titles ;)).

Fun read.

Welcome to MMXXII. About X centuries ago "we" imported the Hindu-Arabic numerals. I know, Latin numbers carry the myth of being more "safe" but really you should try the arabian numerals. They revolutionized math and eased reading text alongside. thumbs-up

It's a convention to use roman numerals for centuries in some european countries. Parent poster probably just done it out of habit.

Thanks, I wasn’t aware it is not a “global” convention and wasn’t sure what does the parent make fun of.

One learns every day :) I will be more careful about this when writing centuries in English the next time.

Also this poster on quora have a detailed list https://www.quora.com/Why-do-we-write-century-numbers-with-I...

A 1914 English translation of his 1499 Italian books from archive.org:

https://archive.org/details/ancientdoubleent00geij

The Medici family supposedly invented it. Very fascinating family.

https://bigthink.com/culture-religion/how-the-medici-family-...

Those are all different things and different forms of borrowing though.

When someone borrows against cheese they are borrowing against existing personal property for which labor has already been supplied rather than borrowing against future earnings. The lender does not need to verify income and credit, just inspect the purity of the cheese. With a home loan, the owner is borrowing against the personal property in the building, as well as the common property in the land and the future earnings of other people such as their tenants.

Additionally in the case of a co-op, the interest charges the organization collects on the debt are usually reinvested locally for the benefit members.

You can borrow against most assets whose values are easy to assess and are readily resellable, and which will keep that value, yes. What’s significant here is cheese being in that category. It’s still (like a home or publicly traded stock) the extreme exception, not the rule. I certainly can’t borrow against the cheese in my refrigerator (“fridge”), so it’s weird that you’d trivialize the case of co-op cheese as part of a totally normal trend of being able to borrow against anything.

Most of the stuff in my living room, for example, would not be able to secure a loan, except maybe a pawn loan on undesirable terms.

And it’s really weird to look at credit cards as an example of the same thing. “Your ability to earn and repay” is not generally classified as an “asset” except maybe metaphorically — not a financial/accounting sense.

“Blessed are the cheese makers”

"Not meant to be taken literally, it refers to any manufacturers of dairy products."

What type of cheese do you make?

This made me laugh so hard, not an ounce of bad intent to the previous post.