What would happen to a kingdom that refused to pay back its debts to whomever?

Question

When for example they said that Britain was in much debt after the Thirty Years War or Seven Years War or whatever, first WHO did it owe money to , and what would happen if it decided not to pay "money" back? And just WHAT is "money" anyway? Why cant it just make its own money or steal it from whomever with its army? I just dont understand this.

Answer 1

the country it owed would financially cripple the debtor by enforcing sanctions and with good enough reason most other countries would side with lender therefore it couldnt get anymore money from anywhere else the country would become unstable and self destuct

Answer 2

Probably nothing at all (I'm assuming that in using the word 'Kingdom' you don't intend to limit the question to monarchies) The United Kingdom has honoured debts and repaid those it incurred with the USA during WW2 - the last payment being made at the end of 2006. The Soviet Union/Russia incurred similar debts but has repaid little or nothing. That is debts between nations.

Nations also incur debts by borrowing from its own citizens/subjects. In the UK there is a market in what is known as 'gilts' - stock issued by the Treasury which anyone can buy - they are repayable at various dates in the future and carry interest. They are traded on stock markets like any other stock or share. If the Government refused to repay at the maturity date there would be a total collapse in confidence and probably a stock market collapse.

Money is anything that people decide mutually can be used to acquire goods and services from another. By and large, however, it was originally gold or silver or a baser metal which was worth the value of the metal it was made from. So if an ounce of gold was worth 1 Yahoo Question coin, the value of that 1 Yahoo Question coin would be an ounce of gold. As societies became more complex this didn't always work. People would clip pieces of gold off gold coins - this became of concern - see http://en.wikipedia.org/wiki/Gresham's_Law
Later still, people would trade using paper money under which a bank would promise to pay the holder so much gold or silver ('the gold standard')
http://en.wikipedia.org/wiki/Gold_Standard
In the 20th century this became impossible for governments to maintain and after some discussion and argument countries ceased tying money to this standard and using for internal exchange pieces of paper ('banknotes') or pieces of cheap metal ('coins') which had no intrinsic value whatsoever.
You have asked later about 'making money' Of course, all countries now 'make' money in that the making of notes and coins is a government monopoly and you face severe penalties for forging.The amount of money in circulation is. however, controlled, to keep control of inflation:-
http://en.wikipedia.org/wiki/Money_supply

Answer 3

that depends how many people and high tech weapons exist within said country that doesnt want to pay back what it owes.

Basically if it happened that someone who had the most guns, soldiers and scary weapons of death chose to start not paying for what they had agreed to, prices within that country (the one that didnt wish to pay but rather said give us what we want and you get to live) would begin to rise, and rise (for all customers equally within that country, even those who didnt really support said robber baron's state), and continue rising to offset the trading costs to other countries that having a bank robber government would cost them to trade with theives so the people they felt sorry for could still have a chance at living inside the robber state. Living standards would begin to decrease and crime rates would rise as a logical result... civilization within said robber state would begin to decay as investment in the illusion of 'more security through more guns' would begin to erode former institutions that existed to help all the people equally.

If it continued for long enough, no trade would be done with the said country by other countries, and what trade was done would only be done by armed force and fear- thus ensuring the work would be done with inferior product quality at every turn. Ie you would be paying more and getting shittier quality for it if you were a customer inside a robber baron country. Fear does not produce quality. It only produces product but generally not a GOOD product.

The only way to stop this inevitable process would be for: people to replace the robber baron with another more honest representative. and then most importantly for the said government representatives to PAY the debts owed to other governments, and earn back trust lost by the threats put upon them by the former robber baron regime, with at least apologies and withdrawls of offensive threatening forces.

The robber state could try to sic their soldiers on the worst 'quality' offenders of product bleeding, but they would quickly realize that if nobody trusts them they cant force stones to bleed or people to give them what they want. People will always resist a theif in their souls and will find revenge in whatever way they can. thats human nature.

Eventually if said robber state continues being a welcher economy of mafia controlled thugs, no one will do business with it. And then you will see Hurricane Katrina was only a taste of the depths the robber state will sink to as the robber state degenarates into anarchy as people begin to hoard the 'good quality' things no longer available within the limits of that state... ironically due to all the 'security' investments it foolishly made and the inevitable backlash against all the illogical rules that prevent honest trade from being done within the boundaries of said fictional state.

Answer 4

War, famine and poverty. They can't steal money or anything because it would only make the condition worse.

Answer 5

Everyone has to pay back what they have borrowed.