CC BY
49
Georgia is a key transit country for the supply of Caspian energy resources to the EU market. The most significant event for Georgia in this area was the full operation of the Baku-Tbilisi-Cey-han (Turkey) oil pipeline and the first gas flows through the Baku-Tbilisi-Erzurum (Turkey) gas pipeline. Georgia, Poland, Lithuania, Azerbaijan and Ukraine have reached an agreement to work together on the extension of the Odessa-Brody oil pipeline to Gdansk in Poland. This agreement will help to increase significantly the supply of Caspian energy resources. Natural gas imports from Azerbaijan have opened opportunities for diversification in Georgia, which was fully dependent on Russian gas supplies. Options for underground gas storage have also been studied. Georgia has actively cooperated in the European Commission’s feasibility study regarding the Trans-Caspian (Black Sea) energy corridor. Together with Kazakh investors, it plans to build an oil refinery at the Batumi Port. These developments are also important for strengthening the EU’s energy security, particularly in relation to projects such as the construction of the Nabucco gas pipeline (from Turkey to Austria).
C o n c l u s i o n
The current European Neighborhood Policy has serious potential to improve economic and social conditions in the EU neighborhood, enhance the investment climate, and provide a more transparent, stable and enabling environment for private sector-led growth in partner countries.
The implementation of this policy will help Georgia in its efforts to reduce poverty, enhance social equality and ensure the country’s sustainable development.
Avtandil SILAGADZE
D.Sc. (Econ.), Professor, Corresponding Member of the National Academy of Sciences of Georgia
(Tbilisi, Georgia).
ECONOMIC THOUGHT IN FEUDAL GEORGIA
Abstract
The author takes a look at the outstanding literary and legal works of feudal Georgia—The Knight in the Tiger Skin by Shota Rustaveli (11th-12th cc.); The Code of Laws of Beka and Agbuga (14th-15th cc.); The Royal Court Regulations of
George V the Illustrious (1314-1346); The Description of the Kingdom of Georgia by Vakhushti Bagrationi (1696-1757); The Book of Law of King of Kartli Vakhtang VI (1675-1737); Kalmasoba by Ioann Bagrationi (1768-1830); and The Book of Wis-
dom and Lies by Sulkhan-Saba Orbeliani (1658-1725)—in order to trace the development of economic thought in Georgia. He discovered that much of what can be found
in these written sources is related to the economic doctrines of mercantilism, classical political economy, and particularly the ideas of the physiocrats.
I n t r o d u c t i o n
The study of economics covers a vast area of intellectual pursuit related to the specifics and complexities of practical economic activities. A multitude of economic ideas, points of view, opinions, and theories exist alongside theoretical models, otherwise known as economic doctrines. In other words, an economic doctrine is the sum-total of postulates indispensable for analyzing all sorts of mechanisms and elaborating fundamental principles which boost the development of practical economic activities and economic science.
To sort out all these economic doctrines, we need to learn as much as possible about the origins and evolution of economic ideas in various historical epochs. In this context, the economic ideas of feudal Georgia found in the written sources of the time deserve close attention.1
Here I have analyzed the following sources, The Knight in the Tiger Skin; The Code of Laws of Beka and Agbuga (compiled in Samtskhe-Saatabago); The Royal Court Regulations, The Description of the Kingdom of Georgia, The Book of Law of Vakhtang VI, Kalmasoba, and The Book of Wisdom and Lies, to demonstrate that some of their ideas laid the foundation for mercantilist, physiocratic, and certain other economic doctrines.
The Knight in the Tiger Skin: Poem by Shota Rustaveli (11th-12th cc.)
The poem was written by a great Georgian statesman and poet who filled the post of mechurch-letukhutsesi (finance minister) under Queen Tamar and King David Soslan (1189-1207). Its economic ideas (examined in detail by Academician V. Chantladze)2 are no less attractive than its ideology and high artistic qualities.
Rustaveli’s poem contains ideas and principles typical of economic doctrines (mercantilism) formulated several centuries later. The author concentrated on methods by means of which wealth (precious metals, money, and expensive clothes) could be obtained and trade (particularly foreign trade) as the principal source of wealth (which can be both gained and lost) encouraged.
1065 GREAT merchants can find nought more profitable than this: They buy, they sell, they gain, they lose; a poor man will be enriched in a month; from all quarters they gather merchandise; the penniless by the end of the year have wares laid by.3
1 See: Monuments of Georgian Law, Vol. 1, Tbilisi, 1963; Vol. 2, Tbilisi, 1965; Vol. 3, Tbilisi, 1970; Vol. 4, Tbilisi, 1972; Vol. 5, Tbilisi, 1974; Vol. 6. Tbilisi, 1974; Vol. 7, Tbilisi, 1981; Vol. 8, Tbilisi, 1985 (in Georgian).
2 See: V. Chantladze, Economic Ideas of Shota Rustaveli, Tbilisi, 1992 (in Georgian).
3 Here and hereafter quoted from: Sh. Rustaveli, The Knight in the Tiger Skin, Transl. by Marjory Scott Wardrop, Ill. by I. Toidze, Introd. by Irakly Abashidze, Progress Publishers, Moscow, 1977, 430 pp., available at [http://www. nplg.gov.ge/dlibrary/collect/0001/000067/Introduction%20%3D.pdf].
The minister of finance was obviously aware of other sources of wealth—agriculture and handicrafts—even though he attached less importance to them.
He encouraged free trade (unhampered movement of commodities); traders, especially those engaged in foreign trade, needed protection: they could not fight off corsairs themselves.
Avtandil fought off the corsairs who attacked a caravan of merchants from Baghdad and never asked for payment. He addressed the merchants with the following words:
1038 YOU merchants are cowards, unskilled in war. Lest they
slay you with the arrow from afar, shut the doors behind you. Behold me alone how I fight, how I use my lion-like arms; see how I make the blood of the corsair’s crew flow.
Rustaveli looked at objects (commodity or property) as a wealth which should bring profit, otherwise it was useless. When engaged in acquiring wealth, one should stay within the moral norms since a good name is more precious than wealth. At the same time, one’s own rather than state property could be given away, as T’hinat’hin did.
52 SHE sent for her faithful, trusty tutor, and said: “Bring
hither all my treasure sealed by thee, all the wealth belonging to me as king’s daughter.” He brought it; she gave without measure, without count, inexhaustibly.
The great mechurchletukhutsesi described the person entrusted with the czar’s personal wealth as “treasurer;” for him, the “state budget” looked like a sea with its ebbs and flows: “having ebbed, water returns.”
Rustaveli’s ideas have very much in common with what Aristotle wrote in his testament about the liberation of slaves, being convinced that the change in the instruments of production would bring about the abolition of slavery. The Georgian author believed that the lower social strata should be liberated unconditionally and acquire private property. Here is what Avtandil says:
801 I HAVE countless possessions weighed by none: Give the
treasure to the poor, free the slaves; enrich every orphan without means; they will be grateful to me, remember me, bless me; I shall be thought of.
This short analysis of the great work of literature suggests that the author formulated mercantilist ideas (as related to trade); he was one of the precursors of the teaching that took shape several centuries later.
The Code of Laws of Beka and Agbuga
In 1334, George V the Illustrious expanded the territory of Georgia to include the Princedom of Samtskhe. From that time on, the Georgian kings appointed administrators (atabags) to this area who had the authority to establish rules of law.
Atabag Beka II (1361-1391) governed the princedom during the invasion of Tamerlane; his grandson Agbuga filled the same post in the first half of the 15th century (1444-1451).
THE CAUCASUS & GLOBALIZATION
Agbuga expanded and embellished the code of laws his grandfather had started until it became what is known today as The Code of Laws of Beka and Agbuga4; it was intended for Meskheti, a large area that covered about one-third of Georgian territory at that time (the districts of Akhaltsikhe and Akhalkalaki, the Artaan region, and the Chorokh Gorge).
In line with the mercantilist doctrine, The Code concentrated on trade; it protected the merchants by saying that those who robbed, murdered, or wounded a merchant “should return twice as much, while the blood shed should be repaid separately.”5 The blood of a rich merchant was assessed at 12 thousand tetri, that of a medium merchant at 6 thousand (Point 96),6 while the blood of a peasant was much cheaper, 400 tetri.7
According to Academician Metreveli, in the 12th century, kings encouraged trade which was closely associated with the crafts, of which Tbilisi was the center. Petty traders worked inside the country and served their masters, while big merchants led caravans to other states and enjoyed a lot of influence. Urtagebi,8 a trade organization, was set up to control caravan trade.
The merchants belonged to the most important social group.
The Code of Laws reveals that the peasants were free and their relations with landowners were temporary; they were commoners with land of their own (described as “bought lands”). Relations between the peasants and the landowners were ruled by contract; prisoners-of-war were one of the sources of slavery.9
According to the feudal relations in Saatabago, the fief belonged to the master; those who wanted to acquire land and own it had to be submissive and dedicated servants; the master was duty bound to bring an offender or criminal to account.
The Code of Laws dwells in detail on the methods of management. If sold for debts, the price was lowered in the hope that the owner could buy it back, allegedly to maintain order.10
Under one of the laws, one could borrow silver and grain (by weight); money (tetri) could be lent and borrowed.11 The payback date and the terms on which privileges could be granted were carefully specified; high interest on debt was banned; The Code directly indicated that three units would be enough to repay two borrowed ones. If anyone demanded more than that the debtor could refuse to pay; if he was forced, a council ruled that what had been paid above the stated sum should be returned since “money-grubbing was sinful.”12
This meant that the maximum interest on lent goods was 50 percent and on money (tetri), 20 percent; “in a year a thousand and two hundred gained on a thousand should be enough.”13
The Code of Laws speaks of “lease” and “rental contracts,” which were not limited to inanimate objects (like in Roman law) but dealt with people and cattle.
It says that if one man hired another for any job (including crafts), the price should be specified by contract and nothing should be paid over and above this amount.14
The Code deals with loan guarantees, of which two types were discerned: for princes (nobles) and for peasants; the former, unlike the latter, could borrow money without any preconditions.15
4 See: “The Code of Laws” of Beka and Agbuga, in: Monuments of Georgian Law, Vol. 1, pp. 423-463.
5 Ibid., p. 463.
6 Ibidem.
7 See: R. Metreveli, Vnutriklassovaia borba v feodalnoy Gruzii (XII v.), Tbilisi, 1973, p. 299.
8 Ibid., pp. 299-300.
9 See: “The Code of Laws” of Beka and Abuga, p. 463.
10 Ibid., p. 462.
11 Ibid., p. 463.
12 Ibid,. p. 462.
13 Ibidem.
14 Ibid., p. 456.
15 Ibid., p. 452.
This means that The Code of Laws of Beka and Agbuga serves as an important source for students of mercantilist literature; it offers economic information which today has acquired particular pertinence. This is especially true of agriculture, industry, and financial relations.
The Royal Court Regulations of George V the Illustrious
George V the Illustrious (1314-1346,) son of Georgian King Demetre II the Self-Sacrificing, ended the Mongolian rule in his country; he personally contributed to The Royal Court Regulations,16 an important code of laws discovered and published by Academician E. Takaishvili in 1920.
According to this monument of Georgian law, the state was a feudal monarchy in which the king ruled with the help of prominent feudal lords and a darbazi, which can be described as a legislature (parliament). It met either as a closed circle (the darbazi members) or in “extended form” when other people were invited to join the session.
The darbazi can be described as a meeting of viziers, eristavs, and bishops; if present the king chaired the meeting himself; otherwise this honor belonged to mtsignobartukhutsesi (the chief scribe, the first vizier).
One of the main roles belonged to the mechurchletukhutsesi, who was one of the viziers. The Royal Court Regulations described his position as exclusive: he looked after the treasury and cash (in the form of gold, silver, money, precious stones, and the Chinese and Kashan treasures)17 and also managed big merchants and all other traders.18
The mechurchletukhutsesi"s functions suggest that The Regulations relied on the mercantilist idea of domestic and foreign trade in which royal property was also involved. The finance minister, however, was expected to concentrate, first and foremost, on state finances (income and spending).
The document uses the following economic terms: tetri (silver coins); lari (treasures, brocade), tvaltva (counting and accounting); iafeba (cheap, simple); saangarisho godori (place where financial documents were kept); molare (cashier), molaretukhutsesi (senior cashier); musha or mushat moaskhio (probably, hired hands); sakrefeli (payment); sachurchle (house in which expensive vessels and treasury were kept); churcheli (gold and silver vessels); mushribi (tax collector and tax keeper), etc. Many of the above terms are still in use, albeit in modified forms.
On the whole, from the point of view of economic theories, the fact that the finance minister looked after trade and merchants deserves special mention: this means that very much like in mercantilism, the feudal monarchy supported trade while state-financial relations were well regulated.
The Description of the Kingdom of Georgia
Mother of Vakhushti Bagrationi (1696-1757), son of Vakhtang VI, was a bonded peasant. In 1724, Vakhushti and his father left for Russia; in 1757 he died and was buried in the Donskoy Monastery in Moscow, a traditional burial place of Georgian emigrants.
16 See: Monuments of Georgian Law, Vol. 3, pp. 32-50.
17 Kashan, a city in central Iran, is famous for its ceramics, carpets, and silk.
18 See: Monuments of Georgian Law, Vol. 3, p. 39.
THE CAUCASUS & GLOBALIZATION
The main part of The Description of the Kingdom of Georgia19 was written in about 1742-1745; it is a veritable treasure trove of information about the country’s natural riches and economic potential from the earlier days to the first half of the 18th century. Vakhtang Bagrationi, its author, was especially eloquent about the idea of Georgian unity.
The Description supplies information about the kingdom’s social structure: society consisted of “eristavs, princes, nobles, merchants, workers and working peasants,” each of the social groups having rights and duties of its own.20
The work uses the word “sachurle” to speak of the treasury supervised by the mechurchletukhut-sesi: “the mechurchletukhutsesi had all the royal valuables and treasures in his hands.”21 Spending, income, etc. were described by special terms.22
When writing about art, Vakhushti also included crafts (handicrafts and construction), in addition to everything else, believing them to be very important for the country’s development.23
He pointed out that the Lazes had made the greatest achievements in art (handicrafts), woodwork, and construction24; while the Ajars were considered excellent cabinet-makers.25
Sale of the products of labor, which was indispensible for the development of trade, also received its share of the attention.
Vakhushti Bagrationi’s profound analysis of Georgia’s economic potential and natural resources allowed him, along with the “classics,” to point to production (crafts and agriculture) as an absolute priority, sale of the fruits of this labor coming second.
The Book of Laws of Vakhtang VI
a. Laws of Vakhtang
King of Kartli Vakhtang VI (1675-1737) was personally involved in writing The Laws of Vakhtang26; paragraphs 115-159 (there are 270 paragraphs in all) form a separate chapter with highly interesting opinions about debts, interest rate, etc.
The Laws accept interest on debt either in monetary form or products (grain and wine), but within certain limits. Paragraph 125, for example, says that it is much better not to cash in on interest and that the higher the gain the less conscience a creditor has (“the less he cherishes his soul”). Gain should be limited to 2.5 percent a month per 1 tetri.27
Well aware that creditors could waive profit only out of fear of God, the law-maker had to establish fair limits on the amount of profit earned.
The interest rate on products most likely reached 100 percent in those days, which weighed heavily on peasants unable to repay their debts on time. In view of this, Paragraph 126 specifies that “fair gain for grain is twelve to ten; however, if anyone wishes to go against their conscience and try the wrath of God, fifteen to ten is sufficient. Higher rates are unacceptable.”28
19 See: V. Bagrationi, The Description of the Kingdom of Georgia, ed. by T. Lomouri, N. Berdzenishvili, Tbilisi State University Press, Tbilisi, 1941 (in Georgian).
20 Ibid., p. 14.
21 Ibid., p. 16.
22 Ibid., p. 17.
23 Ibid., p. 111.
24 Ibid., p. 142.
25 Ibid., p. 134.
26 See: “Laws” of Vakhtang Batonishvili, in: Laws of Vakhtang VI, Tbilisi, 1981 (in Georgian).
27 Ibid., p. 218.
28 Ibid., p. 219.
From this it follows that the interest rate on grain (Paragraph 127) should remain within 16 to 34 percent, which could be considered very lenient. In the case of wine, the gain was 100 percent: “those in debt on old wine should repay with new at a rate of one to two.”29
Paragraph 131 specified the duties of the borrower: he was duty bound to use his own resources to return his debt.30
b. “Dasturlamali^’
In 1707-1709, Vakhtang VI (Batonishvili) created Dasturlamali,31 a book of state and administrative regulation which remained in force in Georgia until it became part of Russia. It included the court code of laws relating to taxation and finances of the Kartli Kingdom.
Dasturlamali is a Persian-Arabic word which means a “handbook,” “instructions” or “directions.” Used in Iran, Turkey, and the Southern Caucasus, it means one of the branches of state law.
Dasturlamali, copied in 1821 from the original, was published in 1886 by Petre Umikashvili.
The code used the following economic terms: gamosagebi (payment); zarafi (money-changer, banker); tavisgasamtekhlo (literally: headache, fine paid by the offender); tetri (silver coins or money in general); ijara (leasing, the right to use something for a definite amount of time and for a definite payment); ijaradari (tenant); bazhi (sales duty); mebazhe (collector of sales duty); begara (a peasant’s duty to work for his master); mosavali (income); mojamagire (hired worker); musha (land-till-er); sabagi (jeweler’s shop, jeweler); sabaga (mold for casting coins); sakomlo gadasakhadi (family payment); samaspindzlo (money used to treat the master); sargo (an official’s property); satarugo (payment to a military commander); sauri (payment); sakvrio gadasakhadi (payment to marry off a widow); sakorugo gadasakhadi (payment for pastureland); jamagiri (wages), etc. Some of the terms are still in use.
On the whole, the Dasturlamali code of law is a valuable historical source brimming with highly interesting information relating to the monetary and fiscal doctrines, certain elements of which were used by the mercantilist and classical (including physiocratic) trends.
Khumarstsavla (Kalmasoba) of Ioann Batonishvili
Ioann Batonishvili (Bagrationi), a prominent statesman and scholar, son of George XII, the last king of Georgia, was born in 1768 in Tbilisi. In 1795, he fought in the Battle of Krtsanisi against Agha Mohammad Khan; in 1801, when the Kartli-Kakheti kingdom was liquidated, he moved to St. Petersburg, where he died in 1830.
In 1799, Ioann presented his father with a project of several reforms of state administration and the education system.32
Kalmasoba, or Khumarstsavla, a collection of encyclopedic knowledge of practically all the natural sciences and humanities, is Batonishvili’s highest creative achievement.
29 Ibidem.
30 Ibid., p. 220.
31 See: “Dasturlamali,” in: Monuments of Georgian Law, Vol. 2, pp. 475-728.
32 See: I. Bagrationi, Sdzhuldeba, Tbilisi, 1957 (in Georgian).
THE CAUCASUS & GLOBALIZATION
He divided art into two types: “abstract” (theology, philosophy, and astronomy) and “businesslike” (jewelry, watch-making, molding, weaving, etc.).33 He also believed that trade, foreign trade included, should be encouraged: trade and crafts should not remain within the country’s borders; they should go beyond it to bring in greater income.34
He believed that trade would meet the needs of cities and enrich the country: “In cities, everyone should live in comfort first, because this adds to the city’s glory and, second, because the country grows rich by trade. Those who live in empty houses and have money should buy everything to make their houses comfortable.”35 Batonishvili was against tax paid in kind or in money: “In the olden days, when Mtskheta was the [capital] city, there were numerous taxes in it. When Tbilisi became the [capital] city, the taxes moved there... One arba has to pay one shauri (1/20 of one tetri) and grain, while the caravans and merchants have to pay 2 shauri.”36
Ioann wrote about money (false and genuine), metal coins made in different countries: “Asians, that is Persians, use black money made of copper, silver as well as gold money. They divide the black money in four parts and use them. In India, people use rupees. Georgians make false tetri and use them, in the way rupees and gold are used, that is, as clean, real tetri.”37
He says that wealth should be used rationally; given by God, who decides how wealth should be used, it requires adequate behavior. He calls on those who have wealth to use it to help the needy and never tolerate the arbitrary rule of the powers that be.38
Khumarstsavla pays a lot of attention to “commerce and trade” discussed from the mercantilist position. Ioann Batonishvili treated commerce (or trade) as an art of exchanging commodity for commodity or commodity for money to obtain maximum profit.39
He described trade, which has existed since ancient times, as an exchange of commodities (which did not involve money) or as “relations of consumer goods exchange,”40 and said that money was a later invention (earlier pieces of leather, gold, silver and copper were circulated).41
Batonishvili spoke of the most successful trading people, “the early Phoenicians, then the Egyptians, Carthaginians, Athenian citizens, and then the French and the Flemish,” as well as his contemporaries—the English, Dutch, Venetians, and Genoese.42
He was convinced that correctly organized commerce required good knowledge of arithmetic and geography: a merchant “should know for sure in which country he can buy goods, what can be bought for the best price, and where. He should know whether prices have risen in a country, where things can be bought cheap, and where he might run into problems.”43
He believed that summer was the best season for merchants; that sea-going vessels were much better suited for trade than pack-horses because, he argued, you could move forty liters by a pack-horse and forty thousand liters by a merchant ship. “See for yourself who will earn more.”44
Ioann Batonishvili did not approve of those who despised trade: “Others got rich from it because these [people] despise trade,” said he.45
He was convinced that export and import (“taking goods out of the country and bringing goods into the country”) requires that the state establish advantageous customs dues. He said that people in
33 See: I. Bagrationi, Khumarstsavla (Kalmasoba), Book I, Tbilisi, 1990, p. 83 (in Georgian).
34 Ibid., p. 93.
35 Ibid., p. 432.
36 Ibid., p. 104.
37 Ibid., p. 476.
38 Ibid., p. 492.
39 Ibid., p. 509.
40 Ibidem.
41 Ibid., p. 510.
42 Ibidem.
43 Ibidem.
44 Ibid., p. 511.
45 Ibidem.
trade and money lending should learn to be satisfied with moderate profit and never exceed the twelve-to-ten profit rate.46
This means that Ioann Batonishvili’s Khumarstsavla, with the questions of trade and commerce he discussed in it, is a valuable historical monument which sheds light on the sources of mercantilist economic doctrines.
The Physiocratic Ideas of Sulkhan-Saba Orbeliani
Sulkhan-Saba Orbeliani (1658-1725), a prominent Georgian writer and public figure, was the tutor of King Vakhtang VI. In 1724, he accompanied the king to Russia; a year later he died in the village of Vsekhsviatskoe outside Moscow and was buried there in the Church of All Saints.
His Sitqvis kona dictionary47 contains numerous mercantilist and physiocratic economic terms, such as “merchant” (trader); “income” (receipt of goods); “fruitful” (bearing fruit), etc.
Academician V. Chantladze48 offered a profound study of Sulkhan-Saba Orbeliani’s economic views paying special attention to physiocratic ideas. The Book of Wisdom and Lies (1686-1695), a collection of didactic fables, is another no less interesting source.49
One of the fables, “Two Rich Men,” compares two rich people, one of whom owns treasures and production facilities, while the other has a large amount of agricultural products.
One of them was rich and the other was even richer, his fame spreading far and wide.
The rich man said to himself: “My treasure is vast; no king has more than I have, yet the wealth of this man is rumored to be vaster than mine. I should take a look at his wealth: I wonder what he has?” He came and asked the other to show him his wealth. This man showed him and said merrily: “Here is what God gave me by His mercy.”
The rich man was very disparaging of him and those who praised his wealth: “I have as many precious stones as you have grains and I don’t think much of them.” With this he left.
Next summer the drought left people without grain and they were hungry. The rich man invited the man rich in grain to come and see him and offered him his wealth in exchange for bread. But the latter did not respond.
He then loaded his precious stones, which nobody needed, on a camel and sent them to the other, asking in return: “Send me an equal weight of grain.” “Don’t tell me what I should ask for my bread,” was the answer. “If you send your wife to me you will have as much bread as you want.”
Disheartened, the rich man said: “If I send him my wife, what shall I say to my friends, and for whom do I then need to buy bread. If I refuse and get no bread, my children will perish.”
He pulled himself together, put his wife on a horse, and sent her off. On seeing the wife, the other rich man greeted her with honors and said: “I saw your husband tortured by pride and full of scorn about my wealth. Take as much bread as you want and return home!”
He gave her a lot of bread and sent her off with God’s grace.50
This conflict demonstrated that the position of man rich in products was preferable to that of his opponent, a conclusion which fit the ideas of the physiocratic school that developed later.
Academician Chantladze, however, wrote that “this does not make Sulkhan-Saba Orbeliani a physiocrat. The physiocratic school emerged in France in the 1750s, therefore, 25 years later.”51
46 Ibid., p. 513.
47 See: S.-S. Orbeliani, Georgian Dictionary, Part I, Tbilisi, 1991; Part II, Tbilisi, 1993 (in Georgian).
48 See: V. Chantladze, Economic Ideas of Sulkhan-Saba Orbeliani, Tbilisi, 1959 (in Georgian).
49 See: S.-S. Orbeliani, The Book of Wisdom and Lies, Tbilisi, 1957 (in Georgian).
50 Ibid., pp. 71-72.
51 V. Chantladze, Economic Ideas of Sulkhan-Saba Orbeliani, p. 42.
Sulkhan-Saba Orbeliani was not a physiocrat; he never spoke of industry as a “fruitless” sphere which means that, on the one hand, his ideas were close to those of the physiocrats, while on the other, they were close to the classical economic theory.
C o n c l u s i o n
This analysis of the history of economic science shows us the dynamics of scientific progress and the driving forces behind it.
It is a concise study of one aspect of this inexhaustible subject demonstrating that the Georgian sources contain ideas fully compatible with the main economic trends.
The Georgian written sources analyzed above, especially The Knight in the Tiger Skin, The Code of Laws, Kalmasoba, and The Book of Wisdom and Lies, demonstrate numerous aspects typical of the economic doctrines of mercantilism, classical political economy, and, in particular, the ideas of the physiocrats.
Vasif ABIYEV
Ph.D. (Econ.), Lecturer, the School of Economics and Management at Khazar University (Baku, Azerbaijan).
THE ROLE OF ASYMMETRIC INFORMATION IN THE FINANCIAL SYSTEM: THE CASE OF AZERBAIJAN
Abstract
This study analyzes nature of financial crises, information asymmetry in the Azerbaijan banking sector and Central Bank’s anti-crisis policies in the global financial crisis period. The implemented anti-crisis programs eliminated credit crunch
problem resulting from asymmetric information problem in the economy. However, the banking sector requires improving modern risk management techniques in order to diminish causes of informational asymmetries.
I n t r o d u c t i o n
The global financial crisis has created complex problems over the world. Financial globalization is accelerating the spread of the crisis worldwide. Policymakers, particularly those in the central
