Recapitulation

As the not new saying goes, there's not much new in this world:

This week the firm disclosed "questionable practices" by its management, which had been overhauled last month, and which meant it had to freeze remaining capital.

It said: "the company has used lenders' capital without their permission", leaving a £3.5m deficit between the amount owed to lenders and the capital available to repay them.

The platform, which promised 12pc returns, has currently lent out £23m but said £2.9m of this had not been assigned to legitimate borrowers.

This is about a peer to peer lending firm called Trustbuddy. But there's nothing very new about what has allegedly happened. Absolutely every form of banking that anyone has ever devised has suffered, at one time or another, from the same problem. And that's of course something that we should all remember: absolutely every form of banking will suffer from exactly the same mistakes and scams as every other form of banking.

We watched with rather a lot of amusement as every such scam, mistake and confusion that banking has been prone to since the first goldsmiths started lending out their stock happened at warp speed in Bitcoin over the past few years. And we've no doubt at all that exactly the same will happen in peer to peer lending and any other form of banking that anyone tries.

This isn't to say that peer to peer, or any of the other possible arrangements, are bad ideas. Indeed we're absolutely delighted to see people at least attempting the disintermediation of banking. Civilisation cannot march on to ever greater wealth unless people are willing to try out the available technological space. But some of those being inventive will end up recapitulating past errors and crimes and for us one of the best guides to this brave new world will be a study of the history of how people have used banking to steal from us.

In this field at least, the past is going to be a very good guide to the future.