Arnold Kling  

On Economic History

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Razib writes,


I think it is critical to emphasize why ancient barbarian elites were so keen on conquering civilized states, and why there seems to have been less mass migration of the peasantry. In the modern world when we think of differences between societies in regards to wealth, complexity or glory, we consider the median man on the street. This would tell us little for most of human history, rather, we would have to focus on the top 10% to truly get a sense of the difference, and in particular the top 1%. To a great extent civilization has been a racket which operates to the benefit of the tiny elite by making rent-seeking much more efficient.

That is how I am inclined to look at it. Where archeologists see trade, I see theft. But that, as you know, is my most wrong view.


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CATEGORIES: Economic History



COMMENTS (24 to date)
Doc Merlin writes:

The common man had no real power in those societies. The invention of the firearm really changed all that.

lukas writes:

Firearms were in wide use in Europe starting in the 16th century, but that didn't empower the common man.

The balance of power only shifted with industrialization/urbanization and the subsequent breakdown of the old social order that has been ongoing since the late 18th century.

razib writes:

in reply to doc merlin,

1) the crossbow was pretty revolutionary when it first showed up. the church tried to ban it in conflicts between christians.

2) there was a major latency between the initial introduction of hand-held firearms (as opposed to artillery) and their genuine substantive utility. i believe that it is often stated that hand-held firearms were more useful for showy "shock & awe" in the 16th century than anything else. though someone more versed in military history could correct me here.

3) i have read that the major shift of firearms was to move the focus of the blood nobility from virtuosity on the field of arms, toward cultural sophistication and refinement. i.e., the resurrection of the ancient roman (and conventional chinese) model of a civilian ruling class who exemplified culture, as opposed to simply patronizing it (as the reputedly illiterate but martial charlamagne did). oh, and also the nobility got really obsessed with hunting animals, since they couldn't fight back :-)

i agree with lukas' point. i believe that greg clark notes that between 1800 and 1970 there was a massive shrinking in the wage gap between a manual laborer and a skilled worker.

finally in that post was kind of emphasizing the downside of takings by rent-seekers. obvious elites didn't always piss-away all the wealth they stole in ephemeral consumables (e.g., Falernian wine). some of it they invested in public works and monuments, and in other cases they patronized what would term "high culture." recall that st. peter's was financed in part by indulgences.

mikedc writes:

"Empowering the common man" has been a long-term process, nothing instantaneous.

I tend to think it's mostly a result of two things. One is (partial) recognition by elites that physical things don't represent much wealth (e.g. the Spanish spending vast amounts of resources carting away gold from the New World to the Old, Augustus rounding up the patricians, killing them, and taking their gold, etc).

Two is the reciprocal increase in understanding that a happy, well-fed populace is usually less likely to rebel.

Observer writes:

Ah, the Stationary Bandit.

And the Greek debacle is a demonstration of the dynamic and result that Olson laid out in the Rise and Decline of Nations.

Doc Merlin writes:

@Lucas:
The "old social order" started to break down with the advent of the firearm.

I agree that industrialization was necessary;I don't think it would have been possible if confiscation of assets/capital by the state (or criminals) was as easy as it had been before the firearm.

Gian writes:

Well how much power did common man had in Hitler's Germany or Stalin's Russia? Or as a Hindu in Jinnah's Pakistan?

I dont get this at all that common man is empowered in Modern period.

FC writes:

Trade is theft. Haven't you people been reading Pravda?

MernaMoose writes:

Where archeologists see trade, I see theft.

That's okay. Where historians see barbarians, I see heros. Think of it as "Now Open Under New Management".

I'm convinced that nations need to do that every so often. Even thieves grow can fat and lazy.

Unfortunately, the advent of decent artillery rendered the once invincible Mongol cavalry obsolete. Barbarians just haven't had the same impact on civilization since then.

mike shupp writes:

Well, this is great fun, but it ain't history.

In the real world, there were Ostrogoths who moved into Italy around 300 AD, Huns pushing into Germany and France in the 400's, Visigoths who moved into Spain the 600's, Vandals who moved North Africa around 630 AD, Vikings who pounced on various parts of Europe from Ireland to Sicily from 800 to 1100 AD, Mongols and 16 other Asian groups who pushed at China for several thousand years. We have to figure individuals in those societies had different ideas of exactly what they were attacking, and different ideas of what success might bring to them. We have to figure they had leaders with differing understandings of political possibilities and strategies, etc.

Trying to figure out great truths about what the Barbarians hoped to gain from attacking Civilizations is about as useful as figuring out great truths about what Western Europeans hoped to gain from attacking Africa and Asia once Columbus proved the world was round. The more general your statement, the less profound.

MikeDC writes:

@ MikeS
I actually think the general result I see there is quite profound. In most every case, what seemed to animate the conquerors (not all of course, but at essence) was a sort of mercantilism that predicted wealth was a concrete thing that could be taken from somewhere else.

In most every case, of course, wealth was actually destroyed and these efforts proved largely counterproductive.

fundamentalist writes:

"But that, as you know, is my most wrong view."

I don't think so, and I think Douglass North would agree. My reading of history shows that for most of it the elite despised commerce. Religious people especially did. The nobility considered it beneath them. The only "noble" ways of getting wealth was through plunder in war, kidapping, extortion or a monopoly on trade. That didn't change until the creation of the Dutch Republic in the 16th century. The Dutch were the first to make commerce the main method of gaining wealth and outlawed the old ways.

As North has written, conquerors maintained their power in traditional states by giving the elite, or nobility, the right to plunder the masses with impunity. Only the modern, open state eliminated that practice.

Tom writes:

"Trying to figure out great truths about what the Barbarians hoped to gain from attacking Civilizations "

Just ask Willie Sutton.

Tracy W writes:

fundamentalist, the elite may have despised commerce. But that doesn't mean that commerce didn't happen. It just means that it wasn't done (openly) by elites, who were, after all, a small percentage of the population. You can find people nowadays who are fervently opposed to pornography and think it should be outlawed, but that doesn't mean that people have stopped making and viewing pornography.

Consider that in medieval times wine from the continent was avaiable in London. Plundering, kidnapping and extortion doesn't get you the ships built to transport wine from Portugal or France or wherever to London, someone actually needs to grow the wine, someone to transport it from the vineyards to the ports, someone to build the ships, someone to load it onto the ships, someone to sail the ships, someone to unload at the other end, someone to distribute it to the rich people's homes, etc. Clearly such trade can survive a bit of plundering and extortion, but if everything was being stolen by the elites, then why would the Portuguese vineyard owners bother, even if they could whip the serfs into labour? They could just grow food and wine for themselves and leave the English elite to drink beer. Or why bother spending months if not years building an expensive ship, if it's just inevitably going to be stolen from you?

I also have doubts about your claim that the Dutch were the first to build fortunes based on commerce, my understanding is that Renassiance Florence's wealth came from its bankers.

As North has written, conquerors maintained their power in traditional states by giving the elite, or nobility, the right to plunder the masses with impunity.

Perhaps. But that doesn't mean that the masses could plunder each other with impunity and thus that trade didn't happen.

William Newman writes:

There was lots of theft and tribute and plunder, but I think there was clearly a substantial amount of true trade, too. It's particularly difficult for me to interpret the history of the various maritime city-states simply in terms of theft. E.g., as far as I know it's uncontroversial that the classical Greek city states commonly produced a lot of wine and olive oil for export. That's not something that seems possible as ordinary theft or plunder: when faced with those problems, people don't focus on producing easily portable goods, they avoid producing them. It could make sense as tribute, but as far as I know the history doesn't support the idea that it was primarily tribute.

I know much less about famous long-distance land trade routes like the Silk Road, but isn't it also uncontroversially true that high-value goods travelled much further than military force was (usually, barring episodes like Alexander's conquests) projected? How does that make sense in terms of anything but trade?

Almost finally, wherever moneylending arrangements and institutions show up in history, my guess is that things couldn't've been so lawless that trade wasn't tempting.

Finally, it is not so easy to drive black markets to the point of irrelevance even when strong central authorities have that as an explicit policy goal.

It'd be easy to convince me that on the order of 50% of exchange value before 1000AD was theft, tribute, plunder, taxation, and so forth, and/or that 70% of the formal economy of some military empire (Rome, e.g.) could be best described in such terms. But you seem to be arguing that less than 25% of the exchanges of goods in the world over that period were free, and I am pretty skeptical about that.

Lord writes:

The elite prospered most outwardly, but security is among the most prized goods of civilization and one which commoners benefited from most of all.

Chris T writes:

"i believe that it is often stated that hand-held firearms were more useful for showy "shock & awe" in the 16th century than anything else. though someone more versed in military history could correct me here."

Pretty true, part of the reason for lining up was that it was only with massed fire that you could hope to actually hit anyone. For a long time firearms were inferior to longbows in lethality. They had one critical advantage, while longbows basically required training from birth, peasants could be taught to use firearms very quickly.

fundamentalist writes:

Tracy: "the elite may have despised commerce. But that doesn't mean that commerce didn't happen."

True, but I was referring to Razib's statement that "ancient barbarian elites were so keen on conquering civilized states." According to North, that was the "honorable" way to gain wealth and keep an elite group of supporters.

Tracy: "I also have doubts about your claim that the Dutch were the first to build fortunes based on commerce..."

Actually, my claim was and is that they were the first to outlaw the traditional methods in which the elite (nobility) gained wealth and elevate commerce to a high level of respect. The Italian city-states went a long way to doing that, but they also depended a great deal on their navy forcing others Northern Europe to trade with the Levant through them, particularly Venice.

Tracy; "that doesn't mean that the masses could plunder each other with impunity and thus that trade didn't happen."

No one is saying that no trade whatsoever happened. But the trade that went on before the Dutch Republic was, according to North, very different from that afterwards. Before the Dutch, commerce depended upon personal relationships and transaction costs were high. After the Dutch, commerce was more impersonal with insurance, guarantees, etc. guiding decision making, and transaction costs were much lower.

razib writes:

Well, this is great fun, but it ain't history.

In the real world, there were Ostrogoths who moved into Italy around 300 AD, Huns pushing into Germany and France in the 400's, Visigoths who moved into Spain the 600's, Vandals who moved North Africa around 630 AD,Vikings who pounced on various parts of Europe from Ireland to Sicily from 800 to 1100 AD, Mongols and 16 other Asian groups who pushed at China for several thousand years.

it is somewhat ironic that mike shupp wishes to reiterate the importance of specific details. he gets specific dates wrong repeatedly, ostrogoths by nearly 200 years, visigoths by nearly 200 years, vandals by nearly 200 years. the comment about the mongols is so general as to be worthless. no wonder mike shupp is skeptical of the possibility of the generalities, he has no basic grasp of the specifics.

(and mr. shupp need not read empires and barbarians to grasp these facts, he can make use of wikipedia)

lukas writes:

The Dutch certainly used their navies to force others to trade with the Far East and the East Indies through them rather than, say, through the Portuguese.

Tracy W writes:

Fundamentalist, perhaps the trade that went on before the Dutch was fundamentally different to the trade that came after. But "trade was different before the Dutch" is very different to claiming that no trade happened, only theft, which is the claim of Arnold's that I thought you were agreeing with.

As for the Italian city states forcing the Northern Europeans to trade with the Levant through them, this rather supports the argument that some people amongst the Northern Europeans and the Levant were willing to trade, even if the elites were opposed to the idea.

fundamentalist writes:

Tracy, I don't think Kling ever argues that no trade went on in the ancient world. The evidence for it is too great. Kling's argument is one of degrees and kinds. The kind of trade carried out since the Dutch Republic is very different from ancient trade, and the volume is very different. It seems to me that Kling's argument is that war trumped trade a a determinant of economic life. Kings would conquer a territory and loot it. Then they would pay soldiers, bureacrats and construction workers (building colliseums) with the loot and the little people would trade with what they had received from the state.

MernaMoose writes:

So fundamentalist, doesn't this mean that everybody -- Greece, California, Uncle Sam -- can solve all their debt problems by conquering and plundering somebody else?

How come people don't think of this anymore? It's enough to make you believe that history has become a huge step backwards.

For it would seem that living within one's means has never been popular anywhere or any time, with rare exceptions. So the name of the game is figuring out how to get away with spending more than you produce, to the greatest possible extent.

Conquest and plunder just seems really expedient here.

Tracy W writes:

Fundamentalist, Arnold said "Where archeologists see trade, I see theft."

I am not surprised that the volume of trade has increased massively since the Dutch Republic - transport technology has changed out of all sight and of course the whole world was opened up. Even if the elite's attitudes to trade had remained exactly the same, I would still have expected a massive increase in trade for those two reasons alone. It may well be that changes amongst the elite in the Dutch Republic also increased the volume of trade, but this strikes me as at best one of a number of contributing causes.

I don't know what you mean by the kind of trade being different. You started off with a statement that the "Dutch were the first to make commerce the main method of gaining wealth and outlawed the old ways", when you talk about the kind of trade being different, are you still talking about the legal setup, or are you talking about some change in the goods traded? The 14th century Florentine bankers provided services throughout Europe, for example lending money to Edward III of England (he defaulted), so clearly financial services were being traded across Europe before the 16th century Dutch got involved.

It seems to me that Kling's argument is that war trumped trade a a determinant of economic life.

I don't know what you mean by the concept of something trumping something else as a determinant of economic life. Yes, if some looting soldier takes all your food, that's pretty important for your economic life. But, also, if you find you can make more money raising sheep on your land and selling the wool than growing wheat, that's too a pretty important determinant of your economc life, sheep farming is a very different business to wheat farming. If a yeoman spent 30 years of adult life raising sheep for money and get his goods stolen three times because of wars, I don't see any compelling reason to say that war trumped trade as a determinant of his economic life. I'd really appreciate it if you'd explain your concept of "trumping", particularly how we can objectively tell when one determinant trumps another.

Kings would conquer a territory and loot it.

This is my problem with Kling's argument. He starts with the elite looting, and missees out the question of who produced the goods in the first place, and why?

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